Leaders of the 27 remaining EU states have approved negotiating guidelines for talks on Britain's future trade and security relations with its European neighbours following Brexit.
The move sets the scene for talks on trade to get under way in earnest, following months of wrangling over the terms of the UK's withdrawal in March 2019 and a 21-month transition period to the new arrangements.
Prime Minister Theresa May called for a "new dynamic" in the next stage of negotiations, in order to reach a deal which will be good for both Britain and Europe.
Addressing the EU27 over dinner in Brussels on Thursday evening, Mrs May said it was their duty to show "energy and ambition" in the upcoming talks.
The Prime Minister extended her visit to the European Council summit in Brussels in order to take part in discussions on US trade tariffs on Friday morning, but she left the meeting to allow the EU27 to discuss Brexit in her absence.
Shortly after the PM left the room, European Council president Donald Tusk announced on Twitter: "Decision: EU27 has adopted guidelines for the future EU-UK relations after #Brexit".
Decision: EU27 has adopted guidelines for the future EU-UK relations after #Brexit— Donald Tusk (@eucopresident) March 23, 2018
Arriving at the summit venue earlier, Mrs May said: "I am looking for a new dynamic in the next stage of negotiations, so that we can ensure that we work together to negotiate and develop that strong future economic and security partnership which I believe is in the interests of the UK and the EU."
Mr Barnier, who kissed Mrs May's hand as they met in the entrance lobby of the Europa building in Brussels, said Friday marked a "decisive" moment in "this difficult and extraordinary negotiation".
He cautioned that the future partnership negotiated over the coming months "must respect the principles and identity of the EU and the single market".
Addressing fellow leaders over dinner on Thursday, Mrs May said "compromise on both sides" had been required to reach a mutually acceptable legal text on the transition.
It will see the UK continue to observe EU rules until the end of 2020 while winning the freedom to negotiate and ratify trade deals with outside countries.
Britain believes that moving on to trade talks with the EU will help unblock the logjam over the Irish border and prevent the need to implement a "backstop" solution proposed by Brussels which would keep Northern Ireland in the customs union.
London is hopeful that a solution to keep the North's border with Ireland open will emerge in the context of a deal allowing trade between Britain and the rest of the EU to be as frictionless as possible.
Mrs May told the EU27 leaders: "We have the chance now to create a new dynamic in the talks, to work together to explore workable solutions on Northern Ireland, on our future security co-operation and in order to ensure the future prosperity of all our people.
"This is an opportunity it is our duty to take and to enter into with energy and ambition."
Taoiseach Leo Varadkar said he envisaged a trading relationship between the UK and the EU "so close that many of the measures in the backstop may become unnecessary".