China is to scrap its decades-long one child per family policy and allow couples to have two children.
The ruling Communist Party says it is to ease family planning restrictions for all couples.
The rule was eased at the end of 2013 with the government saying some families could have two children if they met certain conditions, such as the parent was an only child.
There have been increasing calls for a change because of China's shrinking labour pool.
The population of people of a working age fell in 2012, suggesting China could be the first country in the world to be old before it gets rich.
Practically, there have also been problems because boys are seen as the preferred "one child" and there are now too many men compared with women in the country.
Earlier this week, a university professor suggested women should marry more than one man, as one way of alleviating the problem.
Wang Feng, a leading expert on demographic and social change in China, described the move as an "historic event" that would change the world.
However, he added, the challenges of China's ageing society would remain.
Mr Wang said: "It's an event that we have been waiting for for a generation, but it is one we have had to wait much too long for.
"It won't have any impact on the issue of the ageing society, but it will change the character of many young families."
The one-child policy was introduced in 1980 because of the high birth rate - it has been heavily criticised globally with critics suggesting it is an abuse of human rights.
Parents who broke the rule faced fines and their second child being taken away.
Pregnant mothers could be forced to have terminations or even face sterilisation.
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