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Fifa has approved a proposal to field an all-English team to represent Great Britain at the 2012 Olympics in London.
The four home nations had written to football's governing body clarifying that Scotland, Wales and Northern Ireland would take no part in the team.
The compromise was ratified at Fifa's executive committee meeting in Nassau.
"I am happy, they are happy, the IOC is happy, the organising committee is happy and I hope football is happy," said Fifa president Sepp Blatter.
"You have to bring a Great Britain team for the 2012 Olympics in football, and as they are four associations then take one association to be this team."
The development ends a dispute that has raged since 2005, when London won the right to host the Games.
The Scottish, Welsh and Northern Irish associations had feared their independence in world football would be under threat if they united with England at the Olympics.
A document had been prepared by the Scottish Football Association and sent to the other bodies, which paved the way for England - rebadged as GB in both the men's and women's competitions - to represent Great Britain on a one-off basis.
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MIHIR BOSE BLOG
BBC sports editor Mihir Bose
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This looks set to be in the form of an exclusively under-21 England side - a change Fifa is expected to make from the current under-23 (plus three over-age players) rule.
While expressing his delight about Fifa's approval, secretary of state for culture, media and sport Andy Burnham criticised the rigid stances of the Scottish, Welsh and Northern Irish authorities.
"I think it's very disappointing and actually a bit narrow-minded in some ways that we're just saying young talent from Scotland, Wales and Northern Ireland can't represent that team GB," he told BBC Radio 5 Live.
"I understand entirely if Scotland, Wales and Northern Ireland don't want to be in any way seen to support the principle of team GB... but I think it is very unfair that a young player in Scotland, Wales or Northern Ireland who would get a call-up to that team, would be threatened with sanctions about joining that team.
"I just feel let's put aside the politics, let's just let sports people make their own decisions and let's put the best British team on home soil."
Fifa also approved a trial to use two extra assistant referees behind the goallines for next season's Europa League - formerly the UEFA Cup.
The idea has been championed by Uefa president Michel Platini and was tested last year in some European under-19 championship games.
"The International FA Board decided 'let's have experiments with two additional assistant referees' and we were looking where we have can such experiments," said Blatter. "Now we have found a solution together with Michel Platini and Uefa."
Blatter also announced that Wada has declared Fifa compliant with its world anti-doping code in all areas, except for one area regarding injured players and when they can resume practising with their clubs.
Blatter had previously been opposed to Wada's 'whereabouts' rule, where players have to provide details of their location for one hour every day of the year.
"I'm so happy that this WADA letter just came now," said the Swiss.
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