Rimonabant will be made available to overweight or obese patients who cannot take, or who have had no success with, two other drugs, orlistat and sibutramine.
It comes after concerns about rimonabant's side-effects, including suicidal thoughts and depression.
Today's news comes after the medicines watchdog said last month that it had received 720 reports of adverse drug reactions (totalling 2,123 individual reactions) in the UK since the drug launched in 2006.
Five resulted in death (one suicide, one from infection, one sudden death from an unknown cause and two heart attacks), the data, from the Medicines and Healthcare products Regulatory Agency (MHRA), showed.
Of the total number of reactions, 974 involved psychiatric disorders, of which 48 reports involved suicidal thoughts.
A total of 93 involved depression, 32 involved panic attacks while others related to, among other things, inability to sleep, mood swings and tearfulness.
The drug went on sale in the UK in June 2006 but approval from the National Institute for health and Clinical Excellence (Nice) for use on the NHS has only just been issued today.
People in the UK, Germany, and France are the highest users of rimonabant worldwide. It has not yet been authorised in the US due to safety fears.
In December, research published in The Lancet medical journal warned of the the mental health hazards from rimonabant.
A review of trial evidence involving more than 4,000 patients found they were three times more likely to stop treatment because of anxiety than patients given a dummy drug, and 2.5 times more likely to stop because of depression.
In July last year, the European Medicines Agency warned that rimonabant may be unsafe for patients also taking anti-depressants.
Evidence suggested one in 10 people taking the drug, whose brand name is Acomplia, may develop mental side-effects including low mood and depression, anxiety, irritability, nervousness and sleep disorders.
Today's Nice guidance recommends rimonabant "as an addition to diet and exercise for adults who are obese or overweight and who have had an inadequate response to, are intolerant of or are contraindicated to orlistat and sibutramine".
Orlistat is also known by the brand name Xenical while sibutramine is also known as Reductil.
The guidance said treatment with rimonabant should be continued beyond six months only if the person has lost at least 5% of their initial body weight since starting on the drug.
Patients should be taken off the drug if they return to their pre-treatment weight.
It added: "Rimonabant treatment should not be continued for longer than two years without a formal clinical assessment and discussion of the individual risks and benefits with the person receiving treatment."
Andrew Dillon, chief executive of Nice and lead on the guideline, said: "The independent advisory committee recommended rimonabant, along with diet and exercise, as a treatment option for adults who are obese or overweight.
"This is good news for patients for whom orlistat and sibutramine are not effective.
"Being overweight or obese can lead to a range of serious health problems, including heart disease, Type 2 diabetes, osteoarthritis and some cancers."
Government figures released in January showed that more than one million prescriptions for obesity drugs are now given out to patients.
There were 1.06 million prescription items for obesity drugs in England in 2006 - more than eight times the 127,000 figure for 1999.
Nigel Brooksby, managing director of sanofi-aventis UK, which makes the drug, said: "We are proud to have been able to bring this innovative first in-class treatment to the UK.
"We are delighted Nice has recognised the role rimonabant can play in helping healthcare professionals manage obese and overweight patients.
"We now look forward to working in partnership with the NHS to support the implementation of this guidance."
Dr David Haslam, clinical director of the National Obesity Forum, said: "Obesity is a chronic disease that places a significant burden on society as well as an individual, so it is vital GPs have a full range of options to help treat obese and overweight patients especially those with associated risk factors such as Type 2 diabetes.
"Trials show that rimonabant, in addition to diet and physical activity, provides clinically meaningful weight loss and improvements in related risk factors, such as better blood sugar control.
"Today's new guidance from Nice is of real benefit to doctors trying to manage this growing group of patients."
Around a year ago, sanofi-aventis updated the guidance for doctors regarding rimonabant.
It said rimonabant is not suitable for those with continuing major depressive illness and/or antidepressive treatment.
Depressive disorders or mood alterations with depressive symptoms have been reported in up to 10%, and suicidal thoughts in up to 1% of patients receiving rimonabant, it went on.
"In patients with current suicidal ideations (thoughts) and/or with a history of suicidal ideation and depressive disorder, rimonabant should not be used unless the benefits of treatment are considered to outweigh these risks in an individual patient," it said.
"Obesity is a condition that can be associated with depressive disorders.
"Depressive disorders can be associated with an increased risk of suicidal thoughts, self harm and suicide.
"The prescriber should carefully investigate if the patient has had a depressive disorder in the past in order to evaluate the potential risks with rimonabant treatment."
In July last year, the European Medicines Agency concluded that the benefits of Acomplia continued to outweigh its risks, except in patients with continuing major depression and/or taking antidepressants.
Dr Haslam said: "The Nice guidance is actually reassuring because they've gone through the benefits and risks and still come out with a positive opinion.
"I take this as reassurance because they've helped identify the people who won't do well on it and therefore, if we don't prescribe to them, we will reduce the number of people suffering side-effects."
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