Net migration fell by more than 100,000 to 230,000 in the year to June, according to data from the Office for National Statistics (ONS).
The difference between the number of people coming to live in the UK and the number of people leaving to live elsewhere fell to 230,000 over the period, down from a peak of 336,000 seen in the year ending June 2016
These are the first full-year figures available since the Brexit vote, and Nicola White, the ONS' head of migration statistics, said: "There has been a 43% decrease in the number of people immigrating to look for work over the last year, especially for EU citizens."
She added: "These changes suggest that Brexit is likely to be a factor in people's decision to move to or from the UK - but decisions to migrate are complex and other factors are also going to be influencing the figures."
Panmure Gordon's Simon French said in a tweet that the moderation in inward migration was more a result of easy labour market pick-up and the decline in the value of sterling, than of Brexit.
The number of people moving to the UK to take up a "definite job" remained stable over the year, but the number of jobseekers moving fell 43 per cent to 47,000. However, the ONS said that since net migration remains above zero there are increasing numbers of non-UK workers in the labour market.
"Overall more people are still coming to live in the UK than are leaving and therefore net migration is adding to the UK population," said White.
"The first full year of data since the EU referendum vote in 2016 shows a decrease in the number of people coming to live in the UK and an increase in the number leaving, resulting in a fall in net migration of 106,000. Over three quarters of the fall in net migration was accounted for by EU citizens.
"The decline follows historically high levels of immigration and it is too early to say whether this represents a long-term trend."
The Tories have long been committed to a net migration target in the tens of thousands.
Immigration minister Brandon Lewis, said: "We're determined to ensure the United Kingdom remains open for business attracting the brightest and best, and the most able from around the world.
"That's why it's good to see our visas for entrepreneurs and investors in the United Kingdom are up. Our visa applications for students are up. And our visa applications for visitors are also up, with a record number of passengers coming to the UK as tourists and to study here and to work here."