Germany will send 14 Leopard 2 tanks to Ukraine and has authorised partner countries to also send them - despite threats from Russia.
It means other countries - such as Poland, Spain and Norway - which have stocks of the NATO-standard tank can now supply them to Kyiv.
Yesterday, Moscow warned Berlin that sending tanks "does not bode well for future relations" - and told the US that should it authorise such a move it would be a "blatant provocation".
Ukraine war - latest: Russia sends warning to US over tanks
Kyiv has been pleading for months for Western nations to send modern battle tanks to give its forces the firepower and mobility it hopes will break through Russian defensive lines and recapture territory occupied by Russia.
"This decision follows our well-known line of supporting Ukraine to the best of our ability," German Chancellor Olaf Scholz said in a statement on Wednesday. "We are acting in a closely coordinated manner internationally."
Although Ukraine has stocks of Soviet-made tanks, President Volodymyr Zelenskyy says his forces need more, faster and deadlier weapons - in particular Western tanks - to push the Russians back.
There had been a sense of frustration among some of Germany's allies about the delay in authorising the Leopards to go to Ukraine.
First time since WW2 German tanks will fight on European soil
Sky's Siobhan Robbins in Berlin said the delay in the German chancellor's decision was driven by fears he may escalate the war or make Germany a target.
"This is the first time since World War Two that German battle tanks will fight on a European battlefield," she said.
"The chancellor had to balance the needs of Ukraine with the safety and support of Germans."
The German decision comes after the UK announced it would provide 14 Challenger 2 tanks, which was widely seen as an attempt to persuade other allies to send Leopards, of which there are much higher stocks across Europe.
'Big step towards stopping Russia'
British Prime Minister Rishi Sunak hailed the move "the right decision by NATO Allies and friends".
"Alongside Challenger 2s, they will strengthen Ukraine's defensive firepower. Together, we are accelerating our efforts to ensure Ukraine wins this war and secures a lasting peace," he said.
Polish PM Mateusz Morawiecki, who was among those critical of Germany's reluctance, also welcomed the decision as a "big step towards stopping Russia".
Earlier this week he had said he was prepared to build a "smaller coalition" of countries that would send their tanks to Ukraine.
Sky News understands that American officials will soon announce their intention to send Abrams tanks to help Kyiv fight off Russia's invasion.
Russia mercenary Wagner Group suffers heavy losses
Ukrainian commander's plea for Western upgrades
Russian tanks in 'poor condition'
It comes as British intelligence suggested Russia's most modern tank had been rushed to the warzone despite not being fully operational.
"In recent months, deployed Russian forces were reluctant to accept the first tranche of T-14 allocated to them because the vehicles were in such poor condition," the UK Ministry of Defence said in its latest Twitter update.
"It is unclear exactly what aspects of the vehicles prompted this reaction, but within the last three years, Russian officials have publicly described problems with the T-14's engine and thermal imaging systems.
"Therefore, it is unlikely that any deployed T-14 tanks will have met the usual standards for new equipment to be deemed operational," the MoD added.
First introduced in 1979, the Leopard 2 offers good protection against armour-piercing rounds and anti-tank guided weapons.
On Sunday, the speaker of the lower house of Russia's parliament, State Duma chairman Vyacheslav Volodin, said: "Supplies of offensive weapons to the Kyiv regime would lead to a global catastrophe.
"If Washington and NATO supply weapons that would be used for striking peaceful cities and making attempts to seize our territory as they threaten to do, it would trigger a retaliation with more powerful weapons."