Economy and finance ministers from the 28 European Union countries gave the final green light to Latvia on Tuesday to join the eurozone on January 1 2014.
"ECOFIN has taken final decision approving Latvia's euro membership from 2014," the EU's current Lithuanian presidency announced via its Twitter account.
"Yes we are joining the euro as of January 1 next year," said Prime Minister Valdis Dombrovskis, adding that it was "good news not only for Latvia but also for Europe and the eurozone."
Heading into the ECOFIN council's meeting earlier, Latvian Finance Minister Andris Vilks had described it as a "symbolic day".
Asked whether he had any qualms about joining the single currency at such a difficult time, Vilks acknowledged that "those hard times will last several years at least".
"We trust Europe and we trust the euro," he said later, adding that he hoped Latvia would prove to be one of the "best performers" in the single currency zone.
Latvia emerged from a crisis in 2008-09 to become the EU's fastest-growing economy, having posted GDP growth of more than five percent year-on-year in both 2011 and 2012.
Vilks said Latvia was willing to share its experience of overcoming crisis with its eurozone partners.
Most important for the single currency area are "bold decisions, fast actions from politicians and very good social dialogue," he said.
And speed is of the essence, the minister added.
"If you are delaying this job, it is more and more complicated later on to do something. Europe should do something to get on the track otherwise it will be the loser in a global context," he said.
The situation in the euro area is currently better than before, Vilks added.
"Governments are doing the right job in many of the countries, in fact in all of the countries.
"But it's very difficult to get good results if it's going so slowly. The major issue is speed," he said.