Germany, Denmark and the Netherlands will pool funds to restore at least 100 old Leopard 1 tanks from industry stocks and supply them to Ukraine, according to a joint statement.
The countries said Kyiv would receive at least 100 Leopard 1 A5 tanks within the coming months as well as training, logistical support, spare parts and an ammunition package.
Dutch Defence Minister Kasja Ollongren said the Leopard 1 was "definitely still suitable" for combat use despite being an older model.
"It's really a tested tank," she said on Dutch national broadcaster NOS.
"They're being fixed up and made battle-ready, so they will definitely be useful for the Ukrainians, and also better than a number of Russian tanks."
Details of the deal still need to be worked out with the companies that own the tanks, according to the statement.
The exact number of tanks and whether there would be cost-sharing with the companies were not immediately clear.
There are some 180 Leopard 1 tanks in Germany owned by arms maker Rheinmetall and a company in northern Germany.
In total, the German government approved the export of up to 178 Leopard 1 tanks to Ukraine.
"How many of these tanks can actually be delivered to Ukraine at the end of the day depends on the extent of the restoration work needed," the German economy and the defence ministries said in a joint statement.
The decision was announced as new German Defence Minister Boris Pistorius visited Kyiv where he met President Volodymyr Zelenskiy and his counterpart, Oleksii Reznikov.
Mr Reznikov tweeted a picture of him and Mr Pistorius posing with a scale model Leopard in a display case, writing: "The 'first' Leopard 2 has arrived in Kyiv."
Denmark, Germany and the Netherlands said their Leopard 1 initiative was open to further partners, adding that Belgium had shown "initial interest to participate".
Ukraine should have a double-digit number of the tanks at its disposal in the first quarter, German Vice Chancellor Robert Habeck said, adding that it was unclear exactly how many of the authorised 178 tanks would be sent.
"The numbers are there but they have to be refurbished for battle, re-equipped, so we don't know exactly how many," he told reporters after meeting US Secretary of State Anthony Blinken and National Security Advisor Jake Sullivan in Washington.
"But it's a large number to repel Russia's spring offensive."
Asked whether the decision to send them, taken after months of mounting pressure on Berlin, should have been made earlier, Mr Habeck said: "I hope the decision was taken at just the right time".
Earlier, the head of German arms maker Rheinmetall said it would send Ukraine 20-25 Leopards this year, with the rest of the 88 Leopard 1 tanks it owns in total to be sent next year.
The move follows the German government's decision last month, amid mounting international pressure, to deliver more modern Leopard 2 battle tanks from army stocks.
Ukraine: Last 24 hours 'deadliest so far' for Russia
Ukraine has said the last 24 hours were the deadliest of the war so far for Russian troops, as Moscow pressed on with an intensifying winter assault in the east bringing tens of thousands of freshly mobilised troops to the battlefield.
The Ukrainian claim could not be independently verified and Russia has also claimed to have killed large numbers of Ukrainian troops in recent weeks.
Tallies of enemy casualties from either side have typically been seen as unreliable, and Kyiv offered few details of the latest battles.
But the assertion that the fighting was the deadliest so far fits descriptions from both sides of an escalating campaign of close contact trench warfare, which has left snow-covered battlefields of eastern Ukraine littered with corpses.
The Ukrainian military increased its running tally of Russian military dead by 1,030 overnight to 133,190, and described the increase as the highest of the war so far. For its part, Russia said it had inflicted 6,500 Ukrainian casualties in the month of January.
The war is soon entering its second year at a pivotal juncture, with Moscow attempting to regain the initiative while Kyiv holds out for Western tanks to mount a counter-offensive later in 2023.
After Russia failed to capture the Ukrainian capital last year and lost ground in the second half of 2022, Moscow is now making full use of hundreds of thousands of troops it called up in its first mobilisation since World War Two.
Kyiv and the West say Russia has been pouring troops and mercenaries into eastern Ukraine in recent weeks in hopes of being able to claim new gains around the time of the first anniversary of its full-scale invasion later this month.
The last few weeks have seen Russia boast its first gains for half a year, but the progress has still been incremental, with Moscow yet to capture a single major population centre in its winter campaign despite thousands of dead.
Fighting has focused for months around the Ukrainian-held Bakhmut in eastern Donetsk province, a city with a pre-war population of around 75,000. Russia has made clear progress towards encircling it from both the north and south, but Kyiv says its garrison is holding fast.
Russia has also launched an assault further south against Vuhledar, a Ukrainian-held bastion on high ground at the strategic intersection between the eastern and southern frontlines.
No word from Zelensky on defence minister
Since the New Year, Western countries have pledged hundreds of tanks and armoured vehicles to Ukraine to give it the firepower and mobility to push through Russian lines and recapture occupied territory later this year.
A new US package of weapons is expected to include longer-range rockets, which would give Ukraine the ability to hit Russian supply lines in all of the territory it occupies in Ukraine's mainland and parts of the Crimea peninsula, but it will take months before they arrive.
Meanwhile, Ukraine faces a Russian force with its manpower replenished by Moscow's call-up of reservists. Moscow says the Western supplies of arms only widen and extend the conflict.
"The US and its allies are trying to prolong the conflict as much as possible," Russian Defence Minister Sergei Shoigu said today in a conference call with military officials.
"To do this, they have started supplying heavy offensive weapons, openly urging Ukraine to seize our territories. In fact, such steps are dragging NATO countries into the conflict and could lead to an unpredictable level of escalation."
His use of the phrase "our territories" appeared to refer to four Ukrainian provinces Russia claimed to have annexed last year, as well as Crimea, which it seized from Ukraine in 2014.
Read full coverage of Russia's invasion of Ukraine
In a daily intelligence update, Britain's Defence Ministry said Russia's military had been attempting since early January to restart major offensive operations to capture Ukraine-held parts of Donetsk region, but had gained little ground so far.
The Russians "lack munitions and manoeuvre units required for a successful offensive", it said.
"Russian leaders will likely continue to demand sweeping advances. It remains unlikely that Russia can build up the forces needed to substantially affect the outcome of the war within the coming weeks."
Ukrainian officials say Moscow could be accumulating weapons and reserves for an even bigger push in coming weeks. The Ukrainian governor of Luhansk province predicted a big Russian offensive there that could begin around 15 February.
The past few weeks meanwhile have seen a purge of Ukrainian officials in an anti-corruption campaign, the first big shakeup of Ukraine's leadership since the war began.
In his Monday evening address, Ukrainian President Volodymyr Zelensky said personnel changes on the border and frontline would bolster Ukraine's military efforts.
However, he gave no indication about the fate of his defence minister, Oleksii Reznikov. The head of a parliamentary faction of Mr Zelensky's party had said on Sunday that Mr Reznikov would be replaced, but said yesterday that no changes would be made this week.