The Wetherby-based firm said approval by the Medicines and Healthcare products Regulatory Agency (MHRA) was a "transformative milestone" for its diagnostics division.
Avacta said its AffiDX SARS-CoV-2 antigen lateral flow test will provide a cost effective and rapid means of identifying individuals with a high viral load that means they are more likely to infect others.
The firm has been in talks with the Department of Health to roll out its test in the UK and it is also in active discussion with distributors in 25 EU markets.
Avacta developed the SARS-CoV-2 antigen lateral flow test using its Affimer platform to detect the coronavirus spike antigen. Affimers are Avacta’s high-tech alternative to antibodies.
Avacta recently announced data from a clinical study on 98 positive Covid-19 samples that demonstrated "excellent" performance in identifying the SARS-CoV-2 virus across a broad range of viral loads.
Dr Alastair Smith, chief executive of Avacta Group, said: “I am delighted to receive confirmation of the registration of the AffiDX SARS-CoV-2 antigen test from the MHRA.
"It is a transformative milestone for Avacta’s Diagnostics Division being the first CE marked product powered by the Affimer platform that has been brought to market.
“The excellent results of the recent clinical evaluation of the test at a clinical site in Europe demonstrate the test has excellent sensitivity across a range of viral loads, which would be considered infectious."
As part of the study, the same clinical samples were tested with two leading, commercially available lateral flow antigen tests, and the data showed that the AffiDx test has superior clinical sensitivity across the range of samples and in particular at lower viral loads.
Dr Smith said: “We are very excited by the potential of this high-quality SARS-CoV-2 rapid antigen test and by the interest it has already attracted from potential commercial partners and distributors. We will continue to focus on its commercial roll-out and manufacturing scale-up to meet demand.
“Lateral flow tests have a crucial role to play in helping our society and economy return to normal, and I am confident that the AffiDX test will now play a significant part in this process.”