Energy Secretary Ed Davey told a news conference in London it was a "historic" day.
He said the UK was facing a "looming energy crisis" in the next decade thanks to years of neglect and under-investment.
Much of coal and nuclear-generated energy will stop in the coming years.
"We have known for years this is coming, but no-one was willing to take tough decisions."
Mr Davey stressed the project included plans to cover the costs of de-commissioning, with the operators required to pay into a fund from day one.
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