It says the move will help mobile operators to "increase mobile broadband speeds" as well as offer more mobile broadband coverage in rural areas.
The 2G spectrum is currently used for making phone calls and sending texts.
It could ease some of the pressure on current 3G services, which are feeling the strain from increased use of smart phones and mobile internet.
The major UK mobile phone operators welcomed the move.
The firms could previously only use a limited amount of the available airwaves to deliver 3G services, which include watching net video on handsets.
3G licences were sold to operators in 2000, netting the government more than £20bn.
The remainder of the operators' spectrum was licensed in the 1990s with a condition that it could only be used for 2G services.
The UK was required to free-up its 2G spectrum for 3G use after the introduction of European legislation.
It will mean that Vodafone and 02 will be able to convert their chunks of the 900MHz spectrum, whilst T-Mobile and Orange will be able to switch over their 1800MHz spectrum.
The decision to allow the switchover had taken so long, despite demand for 3G services, because Ofcom had had to work through "competition issues", a spokesperson said.
The decision comes ahead of the Digital Dividend auction, which will see the government sell off swathes of the 2.6GHz and 800Mhz frequencies for next-generation mobile services, which will offer speeds faster than today's 3G networks.
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