The Department for Transport said "improvements in security procedures at the airport, and close co-operation between the U.K. and Egypt on aviation security, mean commercial airlines can now be allowed to operate routes to and from the airport."
"We look forward to services to Sharm el-Sheikh resuming, and lifting the restriction is the first step in that process," said Transport Secretary Grant Shapps, stressing that the "safety and security of British nationals remains our top priority."
Sharm el-Sheikh, a top resort on the Sinai Peninsula, had been a major package-holiday destination for British tourists before the November 2015 attack, which and was claimed by the Islamic State group.
Since the attack, Egyptian authorities have spent millions of dollars to upgrade security at airports across the country. Travel company Tui welcomed Britain's decision and said it planned to re-introduce trips to Sharm el-Sheikh, "taking into account customer demand."
Egypt also welcomed the decision. The country's civil aviation ministry said in a statement that it was a "step forward in a new stage of more flights for U.K. holidaymakers to all Egyptian airports."
Tourism Minister Rania el-Mashat hailed the decision as a "message to the world that Egypt is safe" and that it would have a "positive impact" on British tourists heading to Egypt. Egypt's vital tourism industry has been showing signs of recovery lately, after years in the doldrums because of the political turmoil and violence that followed a 2011 uprising that toppled former leader Hosni Mubarak. The downing of the Russian passenger jet was the final blow.
Airline easyJet said in a statement: "We are aware of the lifting of the restriction on U.K. airlines flying into Sharm el-Sheikh Airport and will look at any opportunities for easyJet and easyJet Holidays as a result."
The travel trade organization Abta noted that Sharm el-Sheikh had been a very popular destination for U.K. holidaymakers in the past and that "the news is also positive for the local economy in this region of Egypt that is reliant on the benefits travel and tourism bring."