Six of the sites shortlisted for the spaceport, due to open in 2018, are in Scotland. They include Glasgow Prestwick Airport and RAF Lossiemouth.
All have to meet strict criteria, including being a safe distance from densely populated areas and a runway that can be extended to more than 3,000m (9,842ft).
The aim is to use the spaceport to launch tourists into space as well as commercial satellites.
By 2030, the Government hopes to capture 10% of the world's space market. If this target is met, opening up the UK tourism industry to specialist operators such as Virgin Galactic and XCor could be worth £40 billion and provide 100,000 jobs.
Making the announcement at the Farnborough Air Show, Aviation Minister Robert Goodwill said: "In order to lead the way on commercial space flight, we will need to establish a spaceport that enables us to operate regular flights.
"The work published today has got the ball rolling - now we want to work with others to take forward this exciting project and have Britain's first spaceport up and running by 2018."
The full list of possible spaceport locations is:
- Campbeltown Airport (Scotland)
- Glasgow Prestwick Airport (Scotland)
- Llanbedr Airport (Wales)
- Newquay Cornwall Airport (England)
- Kinloss Barracks (Scotland)
- RAF Leuchars (Scotland)
- RAF Lossiemouth (Scotland)
- Stornoway Airport (Scotland)
There have been reports that the Government is hoping Virgin boss Sir Richard Branson will build the port as part of his Virgin Galactic project.
Virgin Galactic's first flights are scheduled to take off from a purpose-built spaceport in New Mexico, USA, at the start of the year, with passengers paying £120,000 for a 150-minute flight that will climb to heights of around 62 miles (100km) to achieve zero gravity for approximately six minutes.
The spaceport will have its own dedicated and separate air space in order to manage flights into orbit safely.
After a period of consultation, further work will be done to develop those locations remaining on the site shortlist. Views of local people and other interested parties will be sought before any final decisions are taken.
In August 2012, the Government asked the Civil Aviation Authority (CAA) to look at potential sites that could meet the criteria for a UK spaceport.
Business Secretary Vince Cable said: "Space is big business for the UK. It already contributes £11.3 billion to the economy each year, supporting nearly 35,000 jobs. That's why it's important for us to prepare the UK for new launcher technology and take steps towards meeting our ambition of establishing the first British spaceport by 2018.
"Exploring the opportunities that commercial space flight presents, and potentially making strategic investments in this area, will support the growth of this thriving industry and underpin the economy of tomorrow, making the UK the place for space."
The need for a long runway highlights the fact that what is envisaged is a launch base for spaceplanes, not old-technology rockets.
After a hypersonic re-entry into the Earth's atmosphere, a spaceplane will be travelling far faster than a conventional aircraft and will need more room to land.
Sites in the north of Scotland would keep space flight traffic away from busy transatlantic air corridors.
The focus on Scotland has a political twist, coming ahead of September's independence referendum. If Scotland votes for independence, it could lose the opportunity to host the first true spaceport to be built outside the US.
Virgin Galactic and XCor are both working on spaceplanes that land on a runway.
SpaceShip Two, from Virgin, is designed to be carried by a jet plane mothership to an altitude of 10 kilometres (6.21 miles) where it separates and rockets into sub-orbit.
Xcor's Lynx is a rocket plane that takes off from a runway with no carrier aircraft, but it has yet to fly.
Skylon, from UK company Reaction Engines Ltd, is a more ambitious concept for an unpiloted reusable spaceplane capable of carrying 15 tonnes of cargo into space.
It has a revolutionary engine that combines air-breathing and rocket propulsion to take off and land like a normal aircraft.
Although the engine technology has been tested, the Skylon project has still not left the ground. Reaction Engines director Alan Bond has said he hopes to see the spaceplane in service by 2021/22.