VAT on condoms and other contraceptives has been reduced from 17.5 to 5% in Gordon Brown's Budget.
VAT is currently charged on contraceptives at 17.5%
The move could also see the cost of over-the-counter emergency contraceptives or morning after pills fall from around £25 to £22.
It comes after 69 MPs signed an Early Day Motion in support of a campaign to cut tax on condoms and contraceptives.
Family Planning Association said anything that made them more accessible was welcome.
Earlier this month High Street chemist Superdrug said it was so confident the Chancellor would cut VAT rates it reduced the prices of its condoms.
A Department of Health spokeswoman said it had worked closely with the Treasury on this issue.
"This is a further boost for sexual health signalling the priority government places on cutting the rates of sexually transmitted infections and reducing unintended pregnancies.
"And we look forward to industry continuing to work closely with Government to help achieve this."
Anne Weyman, chief executive of the Family Planning Association, said condoms and emergency contraception are essential items vital to tackling the UK's high rates of sexually transmitted infections and unplanned pregnancy.
"This move will particularly benefit lower income groups, for whom cost may be a key factor in using these methods.
"We'd also like to see increased funding for a wider distribution of free condoms and emergency pills across healthcare services."
Jan Barlow, chief executive of Brook - the sexual health charity for young people, welcomed the announcement saying condoms and other forms of contraception are a necessity, not a luxury.
"Cutting VAT will not only benefit the people left with some extra change in their pockets, it will also help services such as Brook's which buy contraception in bulk to give away to young people who can't afford to pay for it.
"This move is a valuable contribution towards improving Britain's sexual health."
HIV/Aids charity Terrence Higgins Trust, Labour Students and The National Union of Students also welcomed the VAT reduction.
The organisations have been working together to campaign for this reduction to be made and are pleased to see the government making sexual health a priority.
Head of policy at Terrence Higgins Trust Lisa Power said: "We're absolutely delighted that the government have seen sense and reduced VAT on condoms.
"It's fantastic to get a positive result for this campaign which we have been working on for several years.
"If we are to reduce the ever increasing rates of HIV and sexually transmitted infections in the UK, they are a necessity."
Figures out earlier this month showed attempts to reduce the teenage pregnancy rate were behind target despite a £150m campaign.
Reported cases of HIV and other sexually transmitted diseases are also on the rise.
The VAT reduction takes effect from 1 July and will bring tax rates on the products to the lowest possible within the European Union.