THE price of cigarettes is set for a hefty rise, with the federal government today announcing an increase in excise.

And all cigarettes will have to be sold in plain packets by the start of 2012 under a radical government plan to remove one of the remaining forms of tobacco advertising.

How the generic pack of cigarettes will look.

The excise increase will be sold as a health measure but will also help the budget's bottom line, which has to pay for promises made by Prime Minister Kevin Rudd to get his hospital reform deal with the states.

The current excise is about 25¢ a cigarette. The increase is part of the response to the Henry taxation review that will be released on Sunday.