This will be in the next six years.
Secretary for Transport & Housing Prof Anthony Cheung and the MTR Corporation announced the results of the Fare Adjustment Mechanism review.
Prof Cheung said the existing direct-drive formula will be retained under the new mechanism.
"MTR fares will continue to be adjusted according to the formula, which takes into account the composite consumer price index, the nominal wage Index of the transportation section, and the productivity factor."
Prof Cheung said the fare increase rate will decrease by 0.6% for the coming six years.
For the single year of 2017, a further one-off 10% discount will be applied on the fare increase rate after the 0.6% reduction.
Octopus card users will enjoy a 3% discount on all journeys for six months of a year. This will replace the old 10% discount on return trips made on the same day for Octopus card users.
There will be changes to the Profit Sharing Mechanism. Under the new arrangement, the profit-sharing ceiling will rise from the current $13 billion to $15 billion, allowing more profits to be spent on providing concessionary fares.
There will also be minibus-MTR interchange discounts of 30 cents per journey.
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