But Labour accused Mr Osborne of watering down his proposals, which meant there was still a long way to go to achieve a "gold standard service" by April 2015.
In March, Mr Osborne announced the biggest shake-up of tax rules on retirement pots for almost a century.
The changes, due to come into effect a month before the General Election, will mean people will have "complete freedom" to draw down as much or as little of their pensions as they want at any time; they will no longer be forced to use their pensions savings to buy an annuity.
Confirming the Government plan following a consultation, Mr Osborne said: "It is right to support hard-working people that have taken the long-term decision to save for their future and I am pleased the responses we had to our proposals on making pensions more flexible have been overwhelmingly positive.
"We are making sure people have the right support to make their own choice about how best to finance their retirement and I am pleased to confirm everyone with defined contribution pension savings reaching pension age will get free and impartial guidance on their range of available choices at retirement."
In total, 18 million people will be able to benefit from the changes to pensions should they wish to do so, the Treasury said.
From next April, 300,000 individuals a year with defined contribution pension savings will be able to access them as they wish when they turn 55, subject to their marginal rate of tax.
Pensions expert Ros Altmann, the Government's older workers' business champion, said: "The decision that guidance must be impartial and separate from the industry is a real game-changer and will help equip people to make the right decisions for them. The challenge is now firmly with the industry to develop the products people need rather than simply the products they wish to sell."
Gregg McClymont, for Labour, said the Opposition supported flexibility and choice in retirement but stressed the Government had to get the provision of free guidance right.
"The Government has continued to water down its commitment to the next generation of pensioners. First we had advice, which became guidance. Now face-to-face has become online or over the phone," he said. "While further clarity is welcome, there is a long way to go to meet the challenge of providing a gold standard service by April 2015 to ensure people can plan adequately for retirement."
Frances O'Grady, for the TUC, said: "Independent guidance is clearly better than that provided by company sales teams, but half an hour of the best possible advice will not equip people for what could be 30 years of managing their pension pot."