It means talks can move on to the long-term relationship between the UK and EU, days after Theresa May suffered her first defeat in the House of Commons.
Mrs May was applauded by other leaders at dinner in Brussels on Thursday night after she made a speech about Brexit.
The next round of talks on a transition deal for the end of Brexit are expected to begin as early as next week.
The European Commission has said "sufficient progress" has been made on the first phase to move onto discussing the framework of a future relationship - including issues such as security and trade.
BBC
15/12/17
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The European Union cleared the way Friday for Brexit talks with Britain to move onto the second stage, which will involve wide-ranging - and potentially far trickier - discussions on their future relationship and trade.
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