Ukraine will now be able to strike targets inside Russia, most likely at first around the Kursk region, where Ukrainian forces hold over 1,000 sq km of territory.
Ukrainian and US officials expect a counter-offensive by Russian and North Korean troops to regain territory in Kursk.
Ukraine may use ATACMS to defend against the assault, targeting Russian positions including military bases, infrastructure and ammunition storage.
The supply of the missiles will probably not be enough to turn the tide of the war. Russian military equipment, such as jets, has already been moved to airfields further inside Russia in anticipation of such a decision.
But the weapons may grant Ukraine some advantage at a time when Russian troops have been gaining ground in the country’s east and morale is low.
“I don’t think it will be decisive,” a Western diplomat in Kyiv told the BBC, requesting anonymity due to the sensitivity of the matter.
“However, it’s an overdue symbolic decision to raise the stakes and demonstrate military support to Ukraine.
“It can raise the war cost for Russia.”
There are also questions over how much ammunition will be provided, said Evelyn Farkas, who served as deputy assistant secretary of defence in the Obama administration.
“The question is, of course, how many missiles do they have? We have heard that the Pentagon has warned there aren’t that many of these missiles that they can make available to Ukraine.”
Farkas added that the ATACMS could have a “positive psychological impact” in Ukraine if they are used to strike targets such as the Kerch Bridge, which links Crimea to mainland Russia.
The US authorisation will also have a further knock-on effect: enabling the UK and France to grant Ukraine permission to use Storm Shadow missiles inside Russia. Storm Shadow is a Franco-British long-range cruise missile with similar capabilities to the American ATACMS.