Tamoxifen or raloxifene should be offered to women who face a greater risk of developing breast cancer because of their family history, according to NICE.
The drugs are not licensed for preventive treatment in the UK, but NICE said evidence showed they are an effective alternative to mastectomy to prevent the disease.
The Scottish government announced it would introduce a similar scheme.
About 488,000 women in England and Wales - 3% of those aged 35 and older - face a higher risk of breast cancer due to their family history, and about 10,000 cases a year are diagnosed among this group.
Preventive drug treatment for five years will give some women an alternative to what can be 'traumatic' surgery to remove their breasts, NICE said.
The threshold for genetic testing has also been significantly lowered, while routine screening for high-risk patients will be stepped up.
Charities hailed the decision as a 'truly historic moment' in breast cancer care.
NICE's guidance recommends:
- Secondary care doctors should calculate a patient's risk of possessing the faulty BRCA genes, and decide whether to offer genetic testing.
- Testing should now be offered to relatives if their chance of carrying the mutations is 10% or more - half the previous level.
- Annual mammography and MRI will be offered to a larger number of women at risk.
England's national clinical director for cancer, Sean Duffy, said the guidance offered a 'further dimension' to the options for women at risk of breast and ovarian cancers.
Baroness Delyth Morgan, chief executive of Breast Cancer Campaign, said: 'This is a truly historic moment in the treatment of women at increased risk of breast cancer, as we are witnessing a fundamental change of clinical practice driven by medical research.'
Dr Caitlin Palframan, assistant head of policy at Breakthrough Breast Cancer, said: 'Today’s new guidelines are a game changer in the way we prevent breast cancer. Our strongest tool in the fight against breast cancer is prevention, and these new guidelines are a fantastic leap forward in the way we prevent breast cancer developing in those at highest risk.'