David Cameron has secured support from all EU states for new flexibility on VAT which will allow the UK to introduce a zero rating for sanitary products such as tampons.
UK officials said that the European Commission has signed up to the change and will put forward proposals next week. A formal announcement is expected on Wednesday, though the implementation of new rates may take some time to be approved.
The development came after the Government learnt it was facing a Commons revolt by Tory MPs demanding it acts unilaterally to withdraw the charge - in defiance of EU rules.
Chancellor George Osborne had said he expected an announcement "in the next few days" on the so-called "tampon tax".
But Mr Cameron decided to force the issue by raising it at a summit of the European Council in Brussels, where he first spoke to Commission president Jean-Claude Juncker and then asked fellow leaders to include a commitment in the official conclusions of the two-day meeting.
The 28 leaders agreed unanimously to a statement welcoming "the intention of the Commission to include proposals for increased flexibility for member states with respect to reduced rates of VAT, which will provide the option to member states of VAT zero-rating sanitary products".