Lithuania will become the 19th member of the Eurozone on 1 January 2015 after EU finance ministers gave the Baltic state the official go-ahead to join the currency.
The announcement, which followed a recommendation by the European Commission a few weeks ago confirming that Lithuania fulfils all the criteria to join the common currency, leaves only nine EU member states outside the euro.
"Today is a very important day for Lithuania," the country's Finance Minister Rimantas Sadzius said.
The decision is expected to be rubber-stamped by EU heads of states next week.
The Baltic country failed in its initial bid to adopt the euro back in 2007 after it fell short of requirements, which include having government debt no higher than 60 per cent of GDP, a budget deficit below 3 per cent of GDP, low inflation and interest rates.
Countries wishing to join the common currency must also have their currency fixed to the euro for a period of two years.
"This is a well-deserved achievement for Lithuania, after an impressive convergence process and remarkable re-emergence from the financial crisis," Eurogroup chair Jeroen Dijsselbloem said.
The country's central bank estimated that not being part of the euro zone cost the Baltic country 2 per cent of its annual GDP in higher borrowing costs during the global financial crisis.
Dropping their existing currency, the litas, in favour of the euro is a symbolic moment, as the former Soviet state enhances its institutional ties with the EU.
Britain and Denmark are the only two European Union countries with an opt-out clause from joining the euro.