The International Olympic Committee (IOC) has written to the World Chess Federation (Fide) to say the game's governing body is now recognised as an official federation.
The decision means that the grandmasters' game could become an Olympic demonstration sport in 2006, and marks an advance for the British lobby campaigning for chess to be given official status as a sport in this country.
Jon Speelman, three-times British champion and The Independent's chess columnist, welcomed the IOC's decision. Chess, he said, was far more physically exacting than it looked and deserved to be an Olympic sport.
"Although it is sedentary the strain on your body is extremely serious. A game can take six or seven hours and you can have a heartbeat of over 100 for all that time. It's absolutely shattering," said Mr Speelman. He said the British player Nigel Short once lost a stone in a week's competition.
Earlier this year the Fide president, Kirsan Ilyumzhinov, came to London to promote the campaign for chess to be recognised as a sport, and for it be admitted to the Olympic Games. Chess does not come under the definition of a sport under the Physical Training and Recreation Act of 1937, so any elevation of its status would require a change in the law.
Tony Banks, the Sports minister, who is keen to amend the law, said last night: "It is nonsense to have the definition of sport defined by 1937 legislation. As for making the quantum leap to Olympic status, it is not something we can even contemplate until we recognise chess as a sport."
Chess is regarded as a sport in most of the European Community and the old Eastern Bloc, where governments subside the training of top players.