Those passing through the New York City area on longer flights to other destinations will operate between 1,000 feet and 1,300 feet.
Higher altitudes will continue to be reserved for scheduled airline flights and other operations requiring authorization and monitoring by air traffic controllers.
The changes follow recommendations in an FAA task force report compiled after the collision. They are to take effect Thursday.
Babbitt also said Monday that the air traffic controller and supervisor who were on duty at New Jersey's Teterboro Airport, where the plane flight originated, have been fired.
The employees were previously suspended after an investigation found they weren't monitoring the pilot of the small plane as closely as they should have. Pilot Steven Altman, 60, of Ambler, Pa., was unfamiliar with the corridor and had requested their guidance.
The controller failed to notice that the pilot read back the wrong radio frequency after being told to switch over to the control tower at nearby Newark Liberty International Airport. It's not clear whether Altman heard subsequent traffic warnings from controllers just prior to the collision.
The Teterboro controller's supervisor was out of the building on a personal errand.
The crash killed five Italian tourists who were on a helicopter sightseeing tour of New York City, as well as their pilot. Altman and two other people died on the single-engine Piper, which was on its way to Ocean City, N.J.