The regional airliner crashed in February 2009, killing all 49 people aboard and a man on the ground. Although the National Transportation Safety Board said that the captain's incorrect responses to a stall warning caused the accident, it found that both pilots were suffering from fatigue.
Researchers found that fatigue can impair a pilot's performance by slowing reaction time and eroding judgment.
The families of the crash victims have been lobbying Congress and the Obama administration for changes to ensure pilots have enough rest.
"Our charge, above all else, is to save lives and to make sure that we have the safest and best aviation system in the world," said U.S. Secretary of Transportation Ray LaHood. "As long as President Obama and I are on this job, we will never take the American people's trust lightly or their safety for granted. That's what this rule is all about."
The new rules focus on pilot work schedule regulations, which largely date back to the 1960s. A pilot can now be scheduled to work nine to 14 hours, but the FAA is limiting the time in the air actually flying to eight to nine hours.
The rules also increase the minimum amount of time pilots must rest in between flights to 10 hours, which is two more than before.
Capt. Lee Moak, president of the Airline Pilot Association, praised the new rule and credited the FAA for delivering on their pledge.
"Today's pilot fatigue rule release marks historic progress in what must be an unrelenting commitment to ensuring the highest safety standards throughout the airline industry," Moak said in a statement.
The new rule takes into account the number of time zones a pilot crosses and time of day their shift begins and standardizes those requirements for both domestic and international flights.
The FAA was supposed to put the regulations into effect Aug. 1, but the White House delayed release of the rules until Wednesday.
Pilot unions and airlines have been debating the changes and lobbying their sides for more than a year since the FAA released its draft proposal.
The FAA estimates that the changes will cost the industry $297 million over the course of the next 10 years. The rules go into effect in two years to give airlines enough time to make changes.
But cargo carriers - who do much of their flying overnight when people naturally crave sleep - are exempted from the new rules. The FAA said forcing cargo carriers to reduce the number of hours their pilots can fly would be too costly compared to the safety benefits.
Imposing the rules on cargo airlines like Federal Express or United Parcel Service would have added another $214 million to the cost, FAA officials said.
The Associated Press contributed to this report.