Virgin Trains has had its application to share Eurostar’s east London train depot approved by the Office of Rail and Road, paving the way for it to launch international services through the Channel Tunnel.
The regulator has granted access to Sir Richard Branson's company to use the Temple Mills site for maintaining and storing trains.
Access to the depot is a critical requirement for an operator to launch Channel Tunnel services competing with Eurostar.
Temple Mills is the only train depot that can be accessed from High Speed 1, the line that runs between London and the tunnel.
Eurostar has held a monopoly on passenger services through the tunnel since it opened in 1994.
Virgin Trains is planning to launch competing services in 2030.
It will need to gain additional regulatory approvals covering issues such as track access and safety.
Sir Richard said: "The ORR's decision is the right one for consumers. It's time to end this 30-year monopoly and bring some Virgin magic to the cross-Channel route.
"Virgin is no stranger to delivering award-winning rail services, and just as we have successfully challenged incumbents in air, cruise and rail, we're ready to do it again.
"We're going to shake-up the cross-Channel route for good and give consumers the choice they deserve."
Eurostar currently runs trains from London's St Pancras station to locations such as Paris, Brussels and Amsterdam.
The tunnel is only used at about 50% capacity, despite also accommodating LeShuttle vehicle-carrying trains between Folkestone in Kent and Calais in northern France.
The ORR rejected applications from Evolyn, Gemini Trains and Trenitalia to use the Temple Mills depot.
Eurostar was also unsuccessful in seeking permission to use the site's spare capacity to grow.
The ORR said: "Virgin Trains' plans were more financially and operationally robust than those of other applicants, and it provided clear evidence of investor backing and an agreement in principle to deliver the necessary and appropriate rolling stock."
Martin Jones, the regulator's deputy director for access and international, said: "With this decision we are backing customer choice and competition in international rail, unlocking up to £700 million in private sector investment and stimulating growth.
"While there is still some way to go before the first new services can run, we stand ready to work with Virgin Trains as their plans develop."
Rail Minister Lord Peter Hendy said: “I am incredibly pleased on the ORR’s decision to open up spare capacity at Temple Mills depot, which marks a significant step towards growth and a more competitive international rail market.
“Allowing Virgin Trains to share this vital facility will give passengers greater choice, better value and improve connectivity for millions, as well as drive innovation, lower fares and promote greener connections with Europe.
“While this decision is an important first step, we recognise there is significant interest in this and depot capacity should not be a barrier to greater competition and growth. We are therefore exploring plans to establish new depot capacity in the UK, supported by private investment, to meet the needs of the market and will set out further plans in due course.
“We will also continue to champion the reopening Ashford and Ebbsfleet International stations as a priority to restore full connectivity, support tourism and boost growth across the region.”
