The UK is sending four Apache attack helicopters to the mission in Libya, after approval by the prime minister.
If called upon, they will allow for swifter attacks on a wider range of smaller targets in urban areas.
The Apache helicopters, normally based at Wattisham, in Suffolk, are expected to go into operation within days.
Downing Street says intelligence suggests Col Muammar Gaddafi is "on the run" and hiding in Tripoli hospitals in the belief he will be safe there.
The Apache helicopters and their pilots, who are part of the Army Air Corps, are currently on exercise in the Mediterranean.
There had been speculation about the move to deploy them since Monday after France said it would be deploying French Tiger helicopters and the UK would be sending Apaches.
A Downing Street spokesman said: "Ministers have given clearance in principle for the deployment of attack helicopters in Libya. It is a matter now for military commanders to make decisions on deployment."
The final decision rested with David Cameron, who earlier on Thursday had requested more information about possible risks, while he was en route to the G8 Summit in France.
BBC political editor Nick Robinson says the prime minister is determined that the move will not be seen as a desperate attempt to break military deadlock but instead as an example of the UK turning up the heat on the Gaddafi regime.
More than two months after he ordered military action, Mr Cameron has taken another decision which he knows is fraught with risks, adds our correspondent.
The deployment of Apaches in Libya means there will be less chance of civilian casualties in operations that currently rely on the use of Tornado and Typhoon aircraft.
But the Apaches could be targeted themselves as they operate at lower altitudes and Libyan forces loyal to Col Gaddafi still have access to thousands of surface-to-air missiles.
The deployment was discussed at a meeting of the UK's National Security Council at Downing Street on Thursday.
Shadow defence secretary, Jim Murphy, said it marked a serious intensification of Britain's military commitment in Libya.
"It's a totally different order from those in a fixed wing aeroplanes thousands of feet up in the air. These are close combat, fast attack helicopters, vulnerable to ground attack," he said.
"So the government's got to reassure itself and reassure the public about the safety and the risk to our pilots. And in doing that they also have to be clearer about what's the exit strategy, what's the end game in Libya? What's the politics that goes alongside the military effort?"
Col Richard Kemp, former commander of forces in Afghanistan, told BBC Breakfast that Apaches can target individual soldiers, or groups of soldiers, on the ground as opposed to tanks or artillery or buildings.
"They are much more use at dealing with Gaddafi's latest tactics, which include using individuals in civilian clothes," he said.
"They are going to be critical in taking the campaign further and possibly unlocking what is not far off stalemate at present."
Retired Rear Adm Chris Parry, a defence analyst, said there was the potential for the Apaches to escalate the mission in Libya.
"It really depends how you want to use the Apaches. If you use them for protecting civilians, for defensive operations and for interdicting Colonel Gaddafi's re-supply convoys, then I would guess not.
"If you use them for assault operations and in reinforcing the rebels in their attacks on the Gaddafi regime I would say, yes, it is.
UN Security Council Resolution 1973 authorised air strikes to protect Libyan civilians from attacks by forces loyal to Col Gaddafi.
The UN vote followed the violent suppression of protests against Col Gaddafi's regime and military strikes against Col Gaddafi's forces in support of the rebels began on 19 March.