Rules which denied about 4,000 war widows and widowers a military pension are to be changed next year.
From April 2015, those who "remarry, cohabit or form a civil partnership" would be entitled to the pension for life, the Ministry of Defence said.
Under current rules some have to surrender their survivor's pension.
Defence Secretary Michael Fallon said he was putting right an issue that had caused "upset and disappointment for many years".
The War Widows' Association had been due to hand a petition to Downing Street calling on the government to address what it said was an injustice.
AnalysisBy Jonathan Beale, BBC defence correspondent
The government's U-turn is timely. The War Widows' Association had been due to hand in a petition to Downing Street against what it calls an injustice this morning, before they hold their annual Remembrance Service at the Cenotaph in Whitehall.
Now they say they'll be sending the prime minister a thank you letter instead. Around 4,000 people - mostly widows - will benefit from the changes. They are those who lost loved ones serving between 1973 and 2005 - women whose partners died or were killed during the Troubles in Northern Ireland, or the wars in the Falklands and Iraq.
The cost of service pensions to those who remarry or find new partners will be about £120m over the next 40 years - a small price to pay for putting right an anomaly ministers now recognise has caused "upset and disappointment for years".
'Logical arguments'The charity said that under the current system, some of those whose spouses died or left military service between April 1973 and April 2005 stopped receiving their survivor's pension once they remarried, cohabited with a new partner or formed a civil partnership.
But those whose spouse died or left military service before 1973, and those who were widowed after 2005, already kept their survivor's pension through other schemes.
The association said this meant some widows and widowers were effectively left "disadvantaged" because of the date their spouse died, calling it the "wrong time to die".
As of 1 April next year, those who already receive a survivor's pension will be allowed to keep their pension for life if they do remarry, cohabit or form a civil partnership.
War Widows' Association chairman Irene Willis said: "After campaigning for this amendment, which will benefit a small number of war widows whose partners died in service to their country, we are delighted that the government has decided to provide pensions for life."
'Fair and just'Maj Gen John Moore-Bick, general secretary of the Forces Pensions Society, told BBC Breakfast: "One of the aspects of armed forces service in the past, in the present and in the future is a degree of turbulence.
"If you move house 10, 15, 20 times as a military spouse, you haven't any chance of building up any sort of pension entitlement."
He added: "To make this ruling is only fair and just and I'm very pleased the prime minister has done it."
Veterans' minister Anna Soubry told BBC Breakfast it was "the right time to do it".
She said: "The money is not actually very much in the overall scheme of things, it's the principle that's important and it's important that we've done it under the covenant.
"I think that's the first time anything like this has been done under the covenant and it shows the power of it."
The Armed Forces Covenant states that personnel and veterans as well as their families should be "sustained and rewarded" for their service.
Labour said it had pressed the government to "address this anomaly". Shadow defence secretary Vernon Coaker said he was "glad it has now been resolved".
The change will coincide with the launch of the new armed forces pension scheme, the MoD added.
Are you a war widow or widower that did not receive a military pension? What do you think about the proposed changes to the rules on receiving a military pension for life? You can share your experiences my emailing haveyoursay@bbc.co.uk Please leave your contact details if you are happy to talk to a BBC journalist.
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