The government has confirmed the decision to devolve power to charge APD to the Scottish Parliament.
Scotland is now expected to reform and eventually abolish APD, following a commitment made last year by the Scottish National Party.
It follows plans to devolve financial, tax and other powers to Scotland after the ‘no’ vote in last September’s vote on independence.
The legislation was based on the recommendations of the Smith Commission, set up by prime minister David Cameron, although the Westminster bill to deliver the new powers will not be enacted until after the UK election in May.
Transport bodies have responded with caution following the move and said APD will come “at a cost to the competitiveness of regional airports in the north of England”.
“A cut in one part of the UK is unacceptable and the most competitive rate should be matched for the benefit of the whole of UK plc and all UK consumers,” said ABTA CEO Mark Tanzer.
"APD is a damaging tax that puts the UK at a competitive disadvantage - whatever steps the Scottish Government take following today’s announcement, we urge the UK Government to take the initiative now, review the impact of this damaging tax, and cut it to bring it in line with our neighbours,” Tanzer added.
Darren Caplan, CEO, Air Operators Association, said the proposals will have “far-reaching” consequences.
“It is of course a matter for the Scottish Government to decide whether to reduce APD for passengers travelling out of their respective airports, once they are granted the necessary powers, and they should be commended for taking the view that they will ultimately be better off without this damaging tax,” said Caplan.
“However, in the interests of fairness it cannot be right that one part of the UK is able to levy a substantially reduced rate of APD compared to other areas, thus disadvantaging not only our airport members but companies and travellers too,” he added.
The Smith Commission was announced by prime minister David Cameron in the wake of the Scottish independence referendum last year.
Cameron asked Lord Smith of Kelvin to take forward the devolution commitments on further powers for the Scottish Parliament.
In chancellor George Osborne’s Autumn statement last month, APD was scrapped for children under 12.