Environment secretary Hilary Benn pledged to increase funding to Local Authorities to help them deal with new responsibilities for surface water, and said flooding was a high priority as two had died in flooding over the weekend.
Benn said: "Sir Michael's impressive report clarified who should be responsible for what."
"The Government's action plan supports measures to support all his proposed changes," he said.
Pitt proposed that Local Authorities should take the lead in dealing with surface water flooding, and should determine where particular responsibilities lie. He said an extra £15M would be available to help authorites develop surface water management plans.
"I will increase funding to Local Authorities by £15m for those areas at greatest risk from flooding, so they can develop their Surface Water Action Plans," he said.
Hull, Gloucester, Leeds, Warrington, Richmond-Upon-Thames and West Berkshire have all already qualified for more funding.
A further £5M will be available for local authorities to bid for.
Benn said that in the 18 months since the 2007 floods, the Environment Agency has spet £5M on 49 schemes to protect 37,000 homes.
He also said that investment of £2.15bn would be ploughed into flood defence work in the three years up to 2010/11, protecting some 145,000 homes.
"We will be publishing a draft Floods and Water Bill for pre-legislative scrutiny in Spring next year to deal with those of Sir Michael's recommendations, including clearer roles and responsibilities and strengthening reservoir safety, which require primary legislation," he said.
Benn also said that a new floods forecasting agency would be set up between the Environment Agency and MET Office, which will begin operation in April, to improve flood warning.
He said that a special cabinet committee would be set-up to monitor the implementation of Pitt's recommendations. He also said Pitt would remain involved in pushing policy forward.
Responding to the government's announcement, the new Environment Agency chief executive Dr Paul Leinster, said: "We are pleased that the Government agrees that the Environment Agency is the right organisation to be given the strategic overview role for all types of flood and coastal risk in England.
"This role will enable us to provide leadership and to coordinate the planning and management of all sources of flood risk. The forthcoming Floods and Water Bill will give us the proper legal tools and clarity of responsibilities to complete the task ahead.
"We have been working closely with Government, local authorities and emergency responders to ensure that we are all better prepared for flooding when it occurs. Individuals and businesses must also take steps to prepare themselves for the risk of flooding.
"We must all acknowledge the real threat posed by climate change and adapt accordingly to protect lives, the environment and the economy. Investment in flood and coastal risk management should continue to rise to help to meet these challenges," he said.
Last week, Benn confirmed that 200,000km of private sewers and lateral drains would come under water company control in 2011.
That Extra Funding in Full:
£15M to help local authorities co-ordinate and lead flood management locally so that residents know who is in charge in the event of flooding.
£5M to help people to better protect their homes through installing flood protection measures
Up to £2M to improve water rescue, including money for additional rescue boats and trained personnel;
Up to £1.25M funding for Local Resilience Forums to prepare emergency plans in case of reservoir dam failure;
Extra £8.5M for the Environment Agency in its new role as the organisation with overall responsibility for flooding, to make flood warnings available to ex-directory households, improve how potential surface water flooding is predicted and mapped and help the agency implement other recommendations