The European Medicines Agency gave a positive scientific opinion after assessing its safety and effectiveness.
It represents a 'green light' for the Mosquirix jab, developed by GlaxoSmithKline.
The World Health Organization will consider later this year whether to recommend it for children, among whom trials have yielded mixed results.
Malaria kills around 584,000 people a year worldwide, most of them children under five in sub-Saharan Africa.
Mosquirix, otherwise known as the RTS,S vaccine, is the first against a parasitic infection in humans.
Dr Ripley Ballou, head of research at GSK vaccines, said: "This is a hugely significant moment. I've been working on this vaccine for 30 years and this is a dream come true."
The company has not revealed the price of the vaccine, but has pledged not to make a profit from it.
It has been designed specifically to combat malaria infection in children in Africa and will not be licensed for travellers.
Today marks a significant scientific milestone for the long-standing partnership to develop a vaccineSteve Davis, CEO, PATH.
Earlier this year, final results of a clinical trial in seven African countries yielded mixed results.
The best protection was among children aged five to 17 months who received three doses of the vaccine a month apart, plus a booster dose at 20 months.
In this group, cases of severe malaria were cut by a third over four years.
But the effectiveness of the vaccine waned over time, making the booster shot essential.
Without a booster the vaccine did not cut the rate of severe malaria over the trial period.
And disappointingly, the jab did not prove very effective in protecting young babies from severe malaria.
This presents a dilemma for the WHO, which will decide in October whether the vaccine should be deployed, because it is not nearly as effective as scientists would have hoped.
Furthermore, it had been hoped the jab could be administered at six, 10 and 14 weeks, along with other childhood vaccines.
But the results suggest the jabs need to be started later, which would involve a huge amount of organisation and extra cost as it is outside the childhood vaccine schedule.
Furthermore, the trial results show it is crucial that children receive all four doses of the jab in order to benefit.
But even a partially effective malaria vaccine could have a role to play in countries with very high rates of disease.
GSK began research on a malaria vaccine 30 years ago and the first trials in Africa began in 1998.
In 2001 a partnership was established between GSK and the PATH Malaria Vaccine Initiative, through a grant from the Bill and Melinda Gates Foundation, with the aim of accelerating development of malaria vaccines.
I see it as a building block towards much more effective malaria vaccines in years to comeProf Adrian Hill, Jenner Institute, Oxford.
In 2009 11 centres began recruiting 16,000 children in seven sub-Saharan African countries: Burkina Faso, Gabon, Ghana, Kenya, Malawi, Mozambique and Tanzania.
Steve Davis, president and CEO of PATH, said: "Today marks a significant scientific milestone for the long-standing partnership to develop a vaccine, yet several more steps remain before a malaria vaccine might reach the young children in Africa who most need protection against this deadly human parasite."
The vaccine works by triggering the immune system to defend against the first stages of infection by the Plasmodium falciparum parasite after it enters the bloodstream following a mosquito bite.
Prof Adrian Hill of the Jenner Institute, Oxford, said he was pleased and encouraged by the EMA's decision but added that the vaccine was not a "magic bullet".
He said: "A bed net is more effective than this vaccine, but nonetheless it is a very significant scientific achievement.
"I see it as a building block towards much more effective malaria vaccines in years to come."