The European Commission has banned a chemical called Bisphenol A (BPA), which is used in plastic baby bottles.
The commission said that the chemical could affect development and immune response in young children.
The EU ban will come into effect during 2011.
There has been concern over the use of BPA for some time, with six US manufacturers removing it in 2009 from bottles they sold in the US, although not other markets.
The chemical, which is widely used in making hard, clear plastic, is commonly found in food and drink containers.
A European Commission spokesman said the proposal had been approved after being presented to a committee of national government experts on Thursday - months earlier than scheduled - and approved.
John Dalli, Commissioner in charge of Health and Consumer Policy, said the ban was good news for European parents.
"There were areas of uncertainty, deriving from new studies, which showed that BPA might have an effect on development, immune response and tumour promotion," the BBC quoted Dalli as saying in a statement.
EU states will outlaw the manufacture of polycarbonate feeding bottles containing the compound from March 2011, and ban their import and sale from June 2011, the Commission said.
The National Childbirth Trust is a British charity, which has campaigned for the ban.
Its chief executive Belinda Phipps said, "When you put liquids into a bottle - particularly hot liquids or liquids containing fatty liquids - it leaches out of the plastic. And particularly as the bottle gets older and it gets more scratched, more and more leaches out and into the liquid."
Phipps concluded that when a baby drinks from a bottle, which contains BPA, he/she absorbs the leached chemical into its fat.