Updated guidance from the Medicines and Healthcare products Regulatory Agency (MHRA) encourages manufacturers of e-cigarettes to seek to license their products as medicines.
The move paves the way for the potential prescribing of e-cigarettes by healthcare professionals and could allow the use of products with 'strengths and volumes' of nicotine higher than are allowed under existing tobacco and related products regulations.
It comes just over three years after MPs on the House of Commons science and technology committee said GPs should be able to prescribe e-cigarettes to reduce smoking-related deaths.
Draft NICE guidance earlier this year also said health professionals could recommend e-cigarettes or vaping devices to help patients quit smoking.
The MHRA advice says products will need to meet standards required for medicines authorisation as well as medical device regulations where a product is 'refillable and reusable', alongside consumer quality and safety standards.
Clinicians would be able to decide 'on a case-by-case basis' whether e-cigarettes on prescription could help NHS patients to quit smoking.
A DHSC statement said that although e-cigarettes are 'not risk free', UK and US reviews had found that 'regulated e-cigarettes are less harmful than smoking'.
Smoking rates have fallen sharply across the UK over the past decade, dropping from around one in five people in 2011 to just 14.1% by 2019 according to Office for National Statistics data. However, smoking remains the leading preventable cause of premature death and wide differences in rates remain across the country.
The government said e-cigarettes were 'the most popular aid used by smokers trying to quit' in England and had delivered high success rates.
Health and social care secretary Sajid Javid said: 'Opening the door to a licensed e-cigarette prescribed on the NHS has the potential to tackle the stark disparities in smoking rates across the country, helping people stop smoking wherever they live and whatever their background.'
The government will soon publish a new Tobacco Control Plan which will set out the roadmap for achieving a smoke-free England by 2030.