Lithuania passed the last hurdle to becoming the nineteenth member of the euro zone, after its EU peers gave their approval.
A meeting of the 28 member states in Brussels gave the final go-ahead for Vilnius as it cements ties with Europe against the backdrop of the deepening crisis in Ukraine.
The European Commission, the EU's executive arm, the European Central Bank and the European Parliament had all previously cleared the move, which will see Lithuania exchange the litas for the euro on January 1.
"The entry of Lithuania into the euro family is not only a crucial event for this country, but it is of great importance for the whole euro zone," said Sandro Gozi, state secretary for European affairs in Italy, which holds the six-month rotating EU presidency.
Lithuania's adoption of the euro and deeper integration to the EU comes amid widespread apprehension over a resurgent neighbouring Russia and despite doubts over joining a currency rocked by years of crisis.
The expansion also follows EU-wide elections to the European Parliament that showed deep disaffection with the bloc in several countries.
Adopting the euro has been a strategic goal for Lithuania, Prime Minister Algirdas Butkevicius said, after its attempts to join the now 18-member area in 2006-07 was blown off track by the global financial crisis.
Lithuania's accession will strengthen the euro zone, he said, adding: "Deeper euro integration means greater security as well."
Lithuania, once tightly ruled from Communist Moscow, has been among the most strident in calls for tougher sanctions against Russia over its role in the Ukraine crisis.