Afghanistan has made sufficient steps in improving its economy to qualify for debt relief, the World Bank and International Monetary Fund have said.
The move should free up extra funds for health and education
Under the Heavily Indebted Poor Countries Initiative, Afghanistan will now have its net public and private debt payments cut by 51%.
The World Bank said that the move would free up extra funds for healthcare, education and other essential services.
Afghanistan's total overseas debt stood at $11.9bn (£5.9bn) last year.
"Afghanistan's authorities are building a credible track record for implementing economic governance reforms," said the World Bank's director for the country, Alastair McKechnie.
"Debt relief will support national reformers to sustain and deepen this record."
Afghanistan becomes the 31st country to quality for the Heavily Indebted Poor Countries Initiative. Most of the others are in sub-Saharan Africa.