The number of motorists still persisting in using handheld phones while driving is now 1% of the total number of drivers on the road.
The figure stood at 1.7% last year.
The fall can be attributed to the change in the law in February, which raised the penalty for using a handheld phone while driving to three points and a £60 fine.
“The Government introduced this tough penalty to stamp down on mobile phone use at the wheel and this survey suggests more and more motorists are getting the message,” said road safety minister Jim Fitzpatrick.
“Using any mobile phone when driving is distracting – it stops you giving the road your full attention and slows reaction times.
“Research shows it can make a crash four times more likely, so it is vital motorists do not use their phones while driving.”
The results of the survey, carried out by TRL on behalf of the Department for Transport, also found that the number of car drivers using hands-free mobiles dropped from 0.9% to 0.4% during the past 12 months.
However, while car drivers seem to be getting the message, van and HGV drivers are still offending.
While the number of these drivers using handheld phones also fell, 2.4% of commercial drivers are still breaking the law.
The observational surveys were conducted at 30 sites in the south-east of England and involved 10,000 vehicles.
Observers used electronic devices that detect the microwave radiation emitted by both handheld and hands-free mobile phones.
Despite combining visual and electronic detection, the observers may have been unable to detect some phone use and, therefore, the figures could underestimate the actual level of use.