The Office for National Statistics said net migration hit 685,000 in the year to December, down 10% from a record high of 764,000 in 2022.
Experts said it was set to fall "possibly quite sharply, in the year ahead".
Critics insist net migration must be at a level "the public can support" amid pressure on housing, GP surgeries, schools and roads.
But Home Secretary James Cleverly said the 10% fall and visa applications down 25% this year shows the Tory plan "is working but there is more to do. That is why we must stick to the plan, not go back to square one."
He added: "The choice is clear in this election - sticking with our bold, clear plan to control immigration with Rishi Sunak and the Conservatives or going back to square one with Sir Keir Starmer's Labour Party who don't believe in immigration controls, want an illegal immigration amnesty and have no plan to stop the boats.""
Work was the biggest driver of migration in 2023, overtaking study, for the first time since 2019.
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