The business secretary, Vince Cable, is to introduce export restrictions on the painkilling drug sodium thiopental after it emerged that it has been used in executions in the US.

The policy change will mean that any British manufacturer seeking to export the drug will need a licence from the department's Export Control Organisation, involving a long series of questions at both sides of the export process about what the product might be used for. The new regime will be in place "as soon as practicable", most probably within a few weeks.

"In light of new information, I have taken the decision to control the export of sodium thiopental," Cable said in a statement. "This move underlines this government's and my own personal moral opposition to the death penalty in all circumstances without impacting legitimate trade."

The policy change is the result of revelations last month that British-manufactured sodium thiopental was being used as a painkiller in some US states prior to lethal injections.

The decision was announced in a judicial review at the high court in London of Cable's refusal to ban all exports of the drug. The case was launched by the campaign group Reprieve on behalf of two US death row prisoners, Edmund Zagorski and Ralph Baze. Lawyers argued that failing to ban exports was irrational and unlawful as state executions violate human rights.

Reprieve's director, Clive Stafford Smith, said: "All politicians should be congratulated when they admit a mistake, and it is a credit to Vince Cable that he has backed down." However, he added, California was about to receive a shipment of the drug, and the UK government should "take active and urgent steps to prevent this from happening".

Reading-based Archimedes Pharma UK, the only British firm to make the drug, said it did not directly sell to the US, but "will of course respect any new regulations put in place regarding the export of this essential medicine".

It supplies the drug to "the recognised UK pharmaceutical supply chain", with the main customers being NHS hospital pharmacies but also wholesalers, the company added in a statement.

The anaesthetic was used last month to knock out a convicted murderer, Jeffrey Landrigan, before two other drugs that killed him were administered at a jail in Arizona. California also has plans to use the drug in the execution of another convicted killer, Albert Brown. The state's prison system has said that it obtained its latest batch of sodium thiopental "lawfully from within the US".

An export licence will have to be obtained every time the drug is exported and will be refused if the business department has any suspicions it is destined, whether directly or not, for the execution chamber. The drug does, however, have a legitimate medical use and export for this will not be prevented.

The department's spokeswoman said Cable was now hoping to have talks with the European commission and European parliament to bring in an EU-wide system of export controls for the drug.

Oliver Sprague from Amnesty International, which has also campaigned over the drug, said: "Controlling the export of lethal injection drugs is the right thing to do, but it's a shame that it has taken a court case to get the government to do it.

"This is only going to happen again with other drugs or other items if the EU regulations aren't changed at a deeper level."

Sodium thiopental's use has been validated by the US courts. There is a severe shortage of it in the US and several states have had to delay killings because of this.