Three countries - The Netherlands, Belgium and Finland - have given already permission for the use of erythritol, a polyol, in foods.
In addition, manufacturers in these countries can export erythritol-containing products to other EU member states, as long as they are produced according to the regulations currently in force there.
Regulatory harmonisation will now be completed by 2007.
For food companies, the finalisation of the approval process for the sweetener opens up a number of new opportunities.
"The food approval of erythritol as an additive allows food producers to use a novel ingredient with virtually no calories, but which gives body and mouthfeel," said Thomas Strack, product manager at InnoSweet.
"The food industry has waited for this kind of product for a long time."
Cargill Sweetness Solutions has also welcomed the change in EU law, saying it will give food and beverage manufactures across Europe greater flexibility in developing their products.
"For years we have been working on this approval," said Mark Wastijn, marketing director for Cargill Sweetness Solutions.
"The European food industry and health-conscious consumers will highly welcome the EU-approval of erythritol. This new and unique ingredient provides much greater flexibility in the formulation of calorie-reduced and tooth friendly foods."
Erythritol is a non-caloric bulk sweetener with a sweetness intensity 70 per cent that of sucrose. It is the first polyol to be industrially manufactured by a fermentation process and offers both health and indulgence properties.
Erythritol occurs naturally in a wide variety of fruits, vegetables and fermented foods. It has a crystalline appearance, taste and functionality similar to sucrose, yet without the calories.
The group expects erythritol to grow substantially in the coming years. The trend towards reducing overall sugar consumption means that the food and beverage industry is seeking new ways to respond to consumer demands.
The approval comes three years after the Scientific Committee on Food (SCF) expressed its opinion on the safety of erythritol, and nine months after the European Parliaments voting on the relevant amendments to EC Directive 94/35/EC.
The approval treats erythritol in the same way as the other currently permitted polyols, so erythritol will be able to be used at a quantum satis level in foodstuffs, with the exception of drinks and infant products.
A common opinion on the nutritional labelling (90/496/EC) of erythritol is still pending, but producers and consumer organisations are invited to participate in the evaluation being carried out by Platform for Ingredients in Europe (PIE).
Until a different caloric value is implemented, the standard caloric value for polyols has to be included on the label.