It is hoped product placement will boost struggling broadcasters
Product placement will be allowed on British TV programmes under new legislation agreed by the government.
It is thought that lifting the ban on product placement will boost finances in the industry, but alcohol, tobacco, and junk food will not be allowed.
Product placement will also be banned from TV news, current affairs, consumer and religious programming.
There were strict rules about showing products during TV shows. This ban will remain in place on BBC shows.
In a statement, Culture Secretary Ben Bradshaw said: "Adherence to our current position in which UK TV programme-making cannot benefit at all from the income potentially to be generated by product placement would lead to continuing damage to its finances at a time when this crucial part of our creative industries needs all the support we can give it.
"It has become all the more important to make this move now that every other EU member state, with the sole current exception of Denmark, has either allowed television product placement already or has expressed a firm intention to do so.
"Not to do so would jeopardise the competitiveness of UK programme-makers as against the rest of the EU, and this is something which we cannot afford to do."
It has been reported that Mr Bradshaw faced some opposition over lifting the ban which is why alcohol, tobacco and junk food will still not allowed to be shown on screen.
Last year the culture secretary's predecessor, Andy Burnham, said he had "serious concerns" about product placement because it could harm editorial independence.
Speaking to the Media Guardian, John McVay from the Producers Alliance for Cinema and Television, said: "We are not surprised that there are restrictions on the use of product placement - we had anticipated that there would be the same restrictions as there currently are around advertising."