Sons and daughters of any future UK monarch will have equal right to the throne, after Commonwealth leaders agreed to change succession laws.
The leaders of the 16 Commonwealth countries where the Queen is head of state unanimously approved the changes at a summit in Perth, Australia.
It means a first-born daughter of the Duke and Duchess of Cambridge would take precedence over younger brothers.
The ban on the monarch being married to a Roman Catholic was also lifted.
Under the old succession laws, dating back more than 300 years, the heir to the throne is the first-born son of the monarch. Only when there are no sons, as in the case of the Queen's father George VI, does the crown pass to the eldest daughter.
Announcing the changes had been agreed, Prime Minister David Cameron said they would apply to descendents of the Prince of Wales. They will not be applied retrospectively.
David Cameron: ''The idea a younger son should become monarch instead of an elder daughter simply because he's a man... is at odds with the modern countries we have become''
"Put simply, if the Duke and Duchess of Cambridge were to have a little girl, that girl would one day be our queen," he said.
"The idea that a younger son should become monarch instead of an elder daughter simply because he is a man, or that a future monarch can marry someone of any faith except a Catholic - this way of thinking is at odds with the modern countries that we have become."
Australia's Prime Minister Julia Gillard said it was an extraordinary moment: "I'm very enthusiastic about it. You would expect the first Australian woman prime minister to be very enthusiastic about a change which equals equality for women in a new area."
She said the changes appeared to be straightforward. "But just because they seem straightforward to our modern minds doesn't mean that we should underestimate their historical significance, changing as they will for all time the way in which the monarchy works and changing its history."
But the campaign group Republic - which wants an elected head of state in Britain - said "nothing of substance" had been changed.
"The monarchy discriminates against every man, woman and child who isn't born into the Windsor family. To suggest that this has anything to do with equality is utterly absurd," spokesman Graham Smith said.
On scrapping the ban on future monarchs marrying Roman Catholics, Mr Cameron said: "Let me be clear, the monarch must be in communion with the Church of England because he or she is the head of that Church. But it is simply wrong they should be denied the chance to marry a Catholic if they wish to do so. After all, they are already quite free to marry someone of any other faith."
Scotland's First Minister Alex Salmond welcomed the lifting of the ban but said it was "deeply disappointing" that Roman Catholics were still unable to ascend to the throne.
"It surely would have been possible to find a mechanism which would have protected the status of the Church of England without keeping in place an unjustifiable barrier on the grounds of religion in terms of the monarchy," he said.
"It is a missed opportunity not to ensure equality of all faiths when it comes to the issue of who can be head of state."
In her opening speech to the summit, the Queen did not directly mention the royal succession laws, but said women should have a greater role in society.
"It encourages us to find ways to show girls and women to play their full part," she said.
The BBC's royal correspondent, Nicholas Witchell, said this was a hint that the Queen herself backed the change.