Croatia voted on Sunday to join the European Union next year, shrugging off concerns over the economic turmoil in the bloc and fears that membership will compromise its hard-won sovereignty.
Provided all 27 member states ratify its accession, the Adriatic state will enter the EU on July 1, 2013, more than two decades after breaking away from socialist Yugoslavia and fighting a 1991-95 war to secure independence.
It will become the second former Yugoslav republic to join the EU, following Slovenia in 2004.
Sixty-six percent ticked "Yes" in the referendum, the state electoral commission said with almost all votes counted.
"This is a historic moment, and could be a turning point in our history," Prime Minister Zoran Milanovic told reporters.
Turnout, however, was low, at 44 percent of eligible voters, well below the resounding votes of many former communist countries that joined in 2004 and 2007.
That figure appeared to reflect widespread uncertainty among Croats over what membership will really mean.
But the result suggested the EU had not completely lost its appeal in the struggling western Balkans despite the debt crisis that is threatening the single currency.
Many Croats hope accession will mark a clear break with the region's recent past of war and nationalism, and help its weak economy through EU funds and full access to the bloc's common market.
The slow pace of reform in the rest of the western Balkans, and waning enthusiasm within the EU for further enlargement, mean other countries in Croatia's neighborhood - such as Serbia, Bosnia and Albania - will wait years before they too can join. Tiny Montenegro on the Adriatic coast is next in line.
"I feel great relief, for me, for my children," said bank worker Jasna Maric, 43. "Only fifteen years ago, we were still killing each other here, so this was a strategic decision."
Foreign Minister Vesna Pusic, though visibly delighted, sounded a note of caution:
"With this, we leave behind political instability, but the rest will depend on our ability and creativity," Pusic said. "Our chances will be better, but no one will do the job for us."
Croatia saw strong growth in the past decade on the back of foreign lending and waves of tourists to its Adriatic coast, but its economy has been hit hard by the global economic crisis.
It will have to work hard to make its public finances sustainable before it is allowed to join the euro zone, which analysts say is unlikely in the next five years.
Its gross domestic product per capita is 61 percent of the EU average.
Analysts and government officials had warned that rejection of EU accession on Sunday would have hit the country's credit rating, deterred investors and further dampened any prospect of a quick economic recovery.
The "No" camp expressed bitter disappointment, and argued the referendum did not truly reflect the will of the people because of the low turnout.
"This result is against the interests of the Croatian people," said Zeljko Sacic, a war veteran and leading Euro-skeptic.
"This is the end of Croatia's freedom. The EU is falling apart and the Croatian man will be worse off than today."