The 27 countries of the EU agreed late last week to scrap the partnership with the private sector behind Europe's most prestigious technology project, the Galileo satellite navigation system.
By taking Galileo public, the EU will follow the lead of the US, as well as the approach adopted by Russia and China in their pursuit of similar geopositioning systems.
The EU originally planned for a consortium of companies to bear two thirds of the €3.4bn (£2.3bn) development cost, but the consortium failed to agree on how to organise itself.
The companies also doubted the venture's commercial viability because it would face competition from Russia's GLONASS and China's Beidou systems, as well as from the US Global Positioning System (GPS) network that is currently being modernised.
Last month, the European commissioner for transport, Jacques Barrot, proposed taking the project public and after little hesitation, national governments agreed.
Ministers meeting in Luxembourg on Friday "unanimously agreed that work with the concession holders should be terminated and that the next phase would be considered under the responsibility of the public sector", said German transport minister Wolfgang Tiefensee, who presided over the meeting.
"Galileo is at present the most important European high-tech project. It is of colossal importance," he added.