“China will allow all couples to have two children, abandoning its decades-long one-child policy,” the official Xinhua new agency said in a short report.
The decision was contained in a Communist Party communiqué that followed a meeting of the party's Central Committee on planning the country's economic and social development through 2020.
In recent years, it has been unusual for such plenary sessions to result in major decisions. They generally focus on economic topics and there was no indication that this one would take action on the one-child policy.
Couples who flout family planning laws in China are fined at a minimum, some lose their jobs, and in some cases mothers are forced to abort their babies or be sterilized.
There were no immediate details on the new policy or a timeframe for implementation.
A growing number of experts had urged the government to reform the rules, introduced in the late 1970s as a way to curb the population and limit demands for water and other resources. But now it is regarded as outdated and responsible for shrinking China's labor pool.
China's fertility rate, which stood at four births per mother in 1970, was at 1.67 in 2013.
For the first time in decades the working age population fell in 2012, and China could be the first country in the world to get old before it gets rich.
Critics said the earlier relaxation of rules was too little, and too late to redress substantial negative effects of the one-child policy on the economy and society.
Many couples who were allowed another child under the 2013 rules decided not to, especially in the cities, citing the cost of bringing up children in an increasingly expensive country.
State media said in January that about 30,000 families in Beijing, just 6.7 percent of those eligible, applied to have a second child. The Beijing government had said last year that it expected an extra 54,200 births annually as a result of the change in rules.
Wang Feng, a leading expert on demographic and social change in China, called the change an “historic event” that would change the world but said the challenges of China's aging society would remain.
“It's an event that we have been waiting for a generation, but it is one we have had to wait much too long for,” Wang said.
“It won't have any impact on the issue of the aging society, but it will change the character of many young families,” Wang said.
Chinese people took to microblogging site Weibo, China's answer to Twitter, to welcome the move, but many said they probably wouldn't opt for a second child.
“I can't even afford to raise one, let alone two,” wrote one user.
William Nee, a China researcher at human rights campaign group Amnesty International, welcomed the move, but urged China to go further.
“China should immediately and completely end its control over people's decisions to have children. This would not only be good for improving human rights, but would also make sense given the stark demographic challenges that lie ahead,” he said.
Al Jazeera and wire services
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