China is to overhaul the system that migrant workers say has made them second-class citizens, easing the settlement of 100 million people in cities over the next six years.

The plan from the state council will remove the distinction between urban and rural residents, a decision welcomed for its symbolic value at least. It should help migrant workers to access services and social welfare.

But experts warned that the changes to the hukou, or household registration system, fell short of hopes for more comprehensive reform and would have limited impact.

The reforms include exemptions for major cities, and analysts say key measures are not enforceable by the centre. Even if 100 million gain new rights, there are more than that already living in cities without official status.

The hukou system, introduced in the 1950s, ties people's access to services to their residential status. When controls on movement were relaxed, tens of millions of migrant workers left the fields to work in factories, toil on building sites, serve in restaurants or clean homes, contributing to China's spectacular economic growth.

But while they have built new cities and boosted their incomes, they have not enjoyed the same benefits in healthcare, pensions and other social welfare as city residents. Their children often struggle to access education; tens of millions have been left in the countryside to be raised by grandparents.

"Hukou is basically apartheid – apartheid against domestic servants," said Lynette Ong, associate professor of political science at the University of Toronto. "One [question] is whether this makes a difference at the material level, in terms of entitlements and access to education. The second is [how it affects] some of the 'softer' discrimination against people with a rural hukou, with people in cities looking down on them."

China wants 60% of its almost 1.4 billion population to be urbanised by 2020, hoping that their increased consumption as city dwellers will boost the economy.

While the country has seen an extraordinary shift in recent decades – shifting from a predominantly rural to predominantly urban society in 2011 – authorities still fear that an uncontrollable rush to the cities could lead to slums and security problems. Existing residents fear that their privileges may be eroded.

Many of those who have gained urban hukous in recent years have been farmers resettled to small urban centres nearby, often when their land was taken over by the government. Moving across provinces or into major cities has proved – and will remain – far more difficult.

"Most people want to go to the big cities because that's where the opportunities are," said Ong.

Fei-ling Wang, a professor at Georgia Tech and author of Organisation Through Division and Exclusion: China's Hukou System, said: "The system is simply too important to get rid of: it helps the government to rule."

He said even incremental reform was good news, noting that specific details in the document – such as limits on how long governments can require social welfare contributions from migrants before granting them a hukou – should help workers.

He also noted that the document did not get to grips with the crucial question of land rights. In trials, many migrants have been reluctant to adopt an urban hukou because that would mean losing land rights, which they regard as an insurance policy. Deferring the issue might reassure workers for now but raised questions about the long term, he said. "It could even be a new way of appropriating their land."

Lu Yilong, an expert on hukou at Renmin University, said eradicating the urban/rural hukou distinction would form the basis for broader welfare and social service reforms. "Although regional differences, such as the difference between Beijing and Anhui, are likely to linger on, the reform will gradually bridge gaps within the same region," he said.

He said the government needed to follow up with matching reforms in areas such as education equality, social welfare and city planning.

Tao Ran, an expert on rural policy and urbanisation at Renmin University, said funding should be provided for public services. At present, local governments have few sources of income.

Migrants will be able to settle in small cities freely, but will face restrictions if they seek to move to cities with populations of between three to five million and a tough points system for cities with more than five million inhabitants.