EU leaders have agreed to move onto post-Brexit trade talks following months of negotiations.
The President of the EU council, Donald Tusk, confirmed that talks "can move to the next stage".
It comes as a big boost for Theresa May, who has struggled so far with the negotiations in Brussels.
The past few months have seen tense talks over the future of EU citizens, the size of the divorce bill as well as the Irish border, these were a pre-requisite for discussions to begin on trade.
The next phase will focus on the long-term relationship between Britain and the EU.
One of the first issues that will be discussed, possibly before the end of 2017, will be the terms of the transition period that will come into place from March 2019 when Britain officially exits the EU.
Trade talks are expected to tough for both sides, with European Commission President Jean-Claude Juncker warning that this process would be "significantly harder".
Tusk congratulated Theresa May in a tweet, minutes after the conclusion of the 45 minute meeting which has seen European leaders come together as part of their annual summit.
May tweeted back to Tusk , saying: "Thank you to Presidents Juncker and Tusk. Today is an important step on the road to delivering a smooth and orderly Brexit and forging our deep and special future partnership."
Official guidelines for the next phase of talks state that initial drafts were expected in January on how the trade discussions would evolve.
They also confirm that the UK will be leaving both the single market and the customs union, an area that still causes divisions in Westminster.
The guidelines revealed that Britain cannot sign a new trade deal until it becomes a "third country" upon exit from the EU, up until that point, all talks will be preparatory.
May's hopes of commencing trade talks seemed on the verge of collapse with rows with the DUP over the future of the Irish border, but these were resolved last week.
The prime minister has however repeatedly stated that "nothing is agreed until everything is agreed," with the next stage of talks set to be the toughest yet.