European Union leaders have granted Serbia "candidate status", at a summit in Brussels.
Earlier Romania withdrew its objections to Serbia being allowed to start the process of joining the EU.
The summit came two days after foreign ministers from the 27-member bloc recommended accepting Serbia.
Belgrade has made a series of democratic reforms and captured war crimes suspects to satisfy EU demands. It applied for EU membership in 2009.
The president of the European Council, Herman Van Rompuy, confirmed the move in a statement on Twitter.
Romania dropped its opposition after reaching a deal on minority rights.
A decision had been expected on Tuesday, but Bucharest said it would not allow Belgrade to take the next step towards EU membership until assurances were given on respect for 30,000 Romanian-speaking Vlachs in Serbia.
Diplomats on Thursday said an agreement between the two countries had been signed. Romanian President Traian Basescu was understood to have given the green light for Serbia's candidacy.
War crimes arrests
Serbia's path to becoming an EU candidate was given a boost last year when two war crimes suspects, Ratko Mladic and Goran Hadzic, were arrested.
Last week it made a series of concessions on Kosovo - the breakaway territory which has been a major stumbling block.
Significantly, it agreed to allow Kosovo to take part in west Balkan regional meetings, despite refusing to recognise its self-declared independence.
The two sides also agreed to manage jointly their border, scene of recurrent violence between Nato peacekeepers and ethnic Serbs who make up the majority in northern Kosovo.
Some 80 countries have recognised Kosovo since it declared independence in 2008, but a still larger number have withheld recognition.