“I think there’s a broad consensus that this process has to be completed by the scheduled time of the next general election which is in June 2022,” Hammond told BBC radio on Friday.
“Many things will look similar” and goods will continue to flow between the UK and the EU in “much the same way as they do now” even after the scheduled withdraw date of March 2019, he said.
But Hammond said EU citizens would have to register with British authorities starting from the expected departure date if London fails to come up with a new immigration deal with Brussels.
“We’ve been clear that it would be some time before we are able to introduce full migration control between the UK and the EU,” he said.
Curbing mass immigration from the bloc under freedom of movement rules was a major reason why many Britons voted to leave the EU last year.
Hammond, who campaigned for Britain to stay in the EU in last year’s referendum but now supports an exit from the bloc, has been one of the loudest voices among Prime Minister Theresa May’s ministers in calling for a smooth, business-friendly Brexit.
Last year’s referendum to leave the EU did not set out a specific model for Britain’s future relationships with the bloc.