The European Medicines Agency (EMEA) has given it's approval for the antidepressant Prozac to be made available to children.
This means that in effect the drug can now be prescribed to children as young as eight.
Prozac is currently authorised in the EU for the treatment of major depressive episodes, obsessive-compulsive disorder and bulimia nervosa in adults.
The agency has decided that the benefits of the drug outweigh the risks for children with moderate to severe depression, who have failed to respond to psychological therapy.
It advises that the drug only be used in combination with on-going therapy.
Mental health campaigners have welcomed the decision and say it is vital that any use of the drug in children is closely monitored and doctors should exercise extreme caution in administering the treatment to children.
One mental health charity says problems concerning another SSRI, Seroxat which was found to induce aggressive and suicidal feelings in children and adults should remind doctors, patients and carers to report any adverse drug reactions.
Prozac, or fluoxetine, was developed by Eli Lilly but is now widely available in generic versions.
It belongs to a class of drugs known as Selective Serotonin Reuptake Inhibitors (SSRIs) and there have been reports that some SSRIs are associated with an increased risk of suicidal behaviour and thoughts.
The Medicines and Healthcare products Regulatory Agency, in the UK had advised that most SSRIs were not suitable for use in adolescents, but following a review it decided that the benefits of Prozac alone outweighed the risks, and so ruled that the drug could be given to under-18s.
The EMEA says children should be started on a 10mg daily dose of Prozac which could be increased to 20mg per day after one to weeks.
But if no clinical benefit is seen within nine weeks, treatment should be reconsidered.
A system will be put in place to obtain safety data on use of the drug in children, in particular whether there is any impact on sexual development.
Organisations which deal with childhood depression have welcomed the move.
It is estimated that one in ten children are affected by mental illness.