It is the result of a two-year drive by the European Commission and EU Radio Spectrum and road safety experts.
The challenge was to secure radio frequencies that the radar signal could use as most had been used up but this technical issue has now been solved.
Information society and media commissioner Viviane Reding said: 'Short-range radar can save lives. This innovative technology, developed by industry partly with the help of EU-funded research, will reduce the frequency, severity and cost of road accidents.
'The decision opens radio bands to short-range radar while preventing radio interference to other essential users of those frequencies. The commission thereby provides a sound legal basis for an EU-wide market for short-range radar technology. I hope the automotive industry will make full use of this opportunity.'