Dutch Prime Minister Mark Rutte announced the nationwide speed limit will be cut to a maximum of 100 kilometers per hour in a bid to reduce nitrogen emissions.
The current level of nitrogen emissions in the Netherlands is in breach of EU regulations, and it has been exceeding the limits set by the European Union for years.
The new speed limit will only apply during the daytime (7am and 6pm) and will be enforced "as quickly as possible" in 2020.
Speaking at a press conference, Prime Minister Mark Rutte described it as a "rotten measure," which "nobody likes." But said: "There are bigger interests at stake. We need to stop the Netherlands from grinding to a halt and losing jobs unnecessarily."
The decision comes as part of emergency measures Rutte's government will introduce to beat the crisis the country has found itself in after several big infrastructure projects were been put on hold after a court ruling in May demanded greenhouse gas reductions of at least 25 percent.
Rutte says the Netherlands' nitrogen emissions crisis is as big and complex as the refugee crisis of 2015/16.
Ministers have since been trying to find ways to comply with the court order and cut pollution levels in a bid to resume the projects. In particular, the construction of 75,000 homes.
Most of the Netherlands' nitrogen emissions – which register as four times higher than the EU average – come from farms, as the country is the world's second-largest agricultural exporter after the US.
Plans to reduce the country's livestock population sparked protests from farmers, who fear corrective measures will deeply damage their businesses.
Last month, thousands of farmers caused gridlock after they used tractors to block roads around The Hague to oppose the focus on pollution in their sector.
The change will mean the Netherlands will have one of the lowest speed limits in Europe.
The most common maximum speed limit in Europe is 130 kilometers per hour.
Dutch Prime Minister Mark Rutte said the cut to the speed limit was 'a rotten measure.' (Credit: Reuters/Toby Melville)