We propose a novel scheme for confining atoms to optical lattices by engineering a spatially inhomogeneous hopping matrix element in the Hubbard-model (HM) description, a situation we term off-diagonal confinement (ODC). We show, via an exact numerical solution of the boson HM with ODC, that this scheme possesses distinct advantages over the conventional method of confining atoms using an additional trapping potential, including incompressible Mott phases at commensurate filling and a phase diagram that is similar to the uniform HM. The experimental implementation of ODC will thus allow a more faithful realization of correlated phases in cold-atom experiments.