It is higher than the most recent pay award for GPs which was set at 0.8% for GMS practices.
But nurses will see their pay rise more than halve following the final stage of their three-year pay deal, which will be a 2.25% rise in 2010/11.
Chancellor Alistair Darling said on Wednesday that government departments would need to collectively find over £11bn of new savings through reforms.
The DoH and the NHS is to deliver £4.35bn of savings from 2011 as their contribution.
It said the savings will be made through a variety of measures.
This includes a saving of £2.7bn in the care of those with long-term conditions.
This will be done via encouraging patients to self-care, reducing emergency admissions levels and by providing more integrated community services.
A £1.5bn saving is to be made by ‘more effective commissioning'.
This includes reducing unnecessary referrals and prescribing.
There will also be a £100m saving by taking ‘a new approach' to the National Programme for IT.
Health secretary Andy Burnham said: ‘By making tough efficiency savings, this will mean we can continue to increase real terms resources available for patient care year by year.'
Unison said the chancellor should have been tougher on bankers rather than focusing on public sector workers.
Dave Prentis, general secretary of the union, said it was ‘disappointing' that a tax on bankers' bonuses would be lifted after just one year.
Instead, the chancellor has opted to take £20bn from public services over the next two years, said Mr Prentis.
‘This includes £4.4bn cut from public sector workers' pay and pensions, cuts to funding for valuable services in areas such as further and higher education and so-called efficiency savings which too often mean real reductions in quality of the services,' he said.