The result of a confidential deal between the health service and the drug company Roche. Kadcyla, the undiscounted cost of which had been £90,000 per patient, adds an average of six months of life to women with a form of terminal breast cancer. Campaigners have praised the "monumental" U-turn, which will benefit about 1,200 women a year.
"Tough negotiation and flexibility between the NHS and Roche means both patients and taxpayers are getting a good deal," said NHS England chief executive Simon Stevens.
Kadcyla, a combination of two drugs, is used to treat people with HER2-positive tumours that have spread to other parts of the body and cannot be surgically removed.
Scotland decided in April to pay for the drug, but it had been deemed too expensive by the rest of the UK.
In order for a drug to be approved by the regulatory body, the National Institute for Health and Clinical Excellence (NICE), it has to pass a cost-effectiveness test.
The full price drug worked out at £166,000 for every "quality adjusted life year" of good health.
It is not clear how much of a discount has been offered, but it is understood the cost per quality adjusted life year is down to about £50,000.
That is in line with other drugs that extend the life of terminally ill patients.