Asda has said that it will pay staff who are under 18 years old the same hourly rate of pay as older workers.
Asda says it will pay younger workers the same as older staff
The Leeds-based supermarket chain said it had taken the decision in the light of anti-age discrimination laws which came into force on Sunday.
An Asda spokeswoman said: "We no longer think it's acceptable to have different pay rates for different age groups."
Unions have welcomed Asda's decision and urged reform of the minimum wage rules to equalise pay rates.
Under minimum wage law, employers are allowed pay under-21s less than those over 21.
The government argues the pay differential helps to protect employment prospects for younger people.
However, the British Chamber of Commerce told BBC News last week that the new anti-age discrimination law could mean that the system of youth pay rates could be legally challenged.
In response, the government said the legislation was written to allow employers to pay their younger workers less.
Asda said that the new age discrimination law was a factor in its decision to raise youth pay rates for its staff.
"We have taken another look at our policy and have decided... you should be paid for the job you do, regardless of your age," an Asda spokeswoman said.
Raising pay rates will cost the supermarket an estimated £1.7m, pay rates for 16 and 17 year olds will rise from £5.19 an hour to £5.71.
The GMB union said other employers should follow Asda's example on youth pay rates.
"This is a very important breakthrough at Asda for younger workers," said Jude Brimble, national officer for GMB members at Asda.
"The Low Pay Commission (which advises on the national minimum wage) should follow suit and recommend that this becomes the law of the land," she added.