Jersey States has abolished prescription charges from February next year.
A surplus in the Health Insurance Scheme and Health Insurance Fund means the full cost of prescribed medicines can be met through insurance.
Social Security Minister Paul Routier said he was "thrilled" at the Council of Minister's decision.
The minister said it would benefit people on lower incomes with chronic illness needing repeat prescriptions.
Islanders currently pay £2.5m for GP-prescribed medicine every year, with the States subsidising prescriptions by about £11m.
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