British Airways is changing its uniform policy to allow all religious symbols, including crosses, to be worn openly.
Nadia Eweida had challenged the ban on her cross necklace
BA announced a review last year after a row erupted when Heathrow check-in worker Nadia Eweida challenged a ban on her visibly wearing a cross necklace.
The airline now says it will allow religious symbols such as lapel pins and "some flexibility for individuals to wear a symbol of faith on a chain".
BA had banned crosses on chains, but allowed hijabs and turbans to be worn.
The airline argued these could be visible as part of uniform as they could not be worn underneath clothing. The distinction was condemned by bishops and a number of politicians.
Ms Eweida, from Twickenham, London, who has been on unpaid leave since September because of her refusal to stop wearing her cross at work, welcomed the decision.
"I will carry on working as I've always worked. My dignity has been restored. I've suffered for my faith," she said.
The row sparked by Ms Eweida's case attracted much media attention, with even Tony Blair being drawn in.
Asked at a conference by BA's Martin Broughton how they should handle the issue, the prime minister advised them to "do the sensible thing".
The company has always argued it never intended to discriminate against Christians in its policy on jewellery, but was bound to follow anti-discrimination laws to the letter.
During the review, BA consulted staff and customers, examined the uniform policies of other organisations and canvassed the opinions of the Church of England, the Roman Catholic Church and the Muslim Council of Britain.
British Airways chief executive Willie Walsh said: "Unintentionally, we have found ourselves at the centre of one of the hottest social issues in current public debate.
"Most of those consulted felt that a lapel pin was an acceptable and reasonable option. For the majority of our staff, this was the preferred option.
"However, some respondents believed that limiting the change to a pin would not satisfy all Christians.
"Comparisons were made between the wearing of a cross around the neck and the wearing of hijabs, turbans and Sikh bracelets. For this reason, we have decided to allow some flexibility for individuals to wear a symbol of faith on a chain."
Church of England leaders welcomed the move.
Archbishop of Canterbury Rowan Williams said: "I am grateful that BA have listened to the deep concerns that have been expressed about this issue and that their change of policy now allows Christians to wear crosses openly.
"Important issues have been raised. This is a positive and constructive outcome."
Dr Williams had previously said that the Church, which is an investor in BA, would "rethink its whole attitude" to the airline.
Archbishop of York John Sentamu, who had accused BA of forgetting the values of the country it represented, responded by saying "praise the Lord!", adding that the airline had "finally shown both grace and magnanimity".
The Transport and General Workers Union, which represented Ms Eweida, was happy with BA's statement.
A spokesman said: "It appears to deal with all the issues raised in recent months. We will now study the details and consult further with our representatives at BA."