Lithuania had been holding out for an extension of the proposed route to include its capital, Vilnius, causing new delays and doubts to a project that has so far failed to get off the drawing board since it was first discussed in 2001.
With a Vilnius extension now included in the plan, the work of actually constructing the line has moved one step closer.
When complete the Rail Baltica project will create a connection spanning the region making it possible to catch a train from Berlin to Helsinki via the Baltic capitals.
The Baltic states' railway networks are currently of limited size and based on Russian-gauge tracks and mainly outdated Soviet-era rolling stock and infrastructure.
Rail Baltica is among 30 priority transport projects identified by the European Union.
Completion of the project, projected for 2025, is expected to cost up to 3.7 billion euros of which 2.5 billion would be funded by the European Union.