The announcement confirms that draft recommendation and comes after a unique agreement between NICE and the drug's manufacturer, Novartis.
Under the deal the NHS will only fund 14 injections, with the cost of any more being met by manufacturer Novartis in a scheme dubbed "dose capping".
Trusts now have three months to comply with the decision.
But the process which has led to the recommendation has caused much controversy.
With clinical trials showing impressive results, some primary care trusts (PCTs), which decide on funding on a local level in the NHS, have been paying for the treatment ahead of final NICE approval.
This has prompted accusations of a postcode lottery in the NHS and led to legal action against PCTs which were not paying for it.
In one recent case, three Warwickshire pensioners ended up in the High Court, winning an out of court settlement last month.
Wait
Steve Winyard, head of campaigns at the Royal National Institute for the Blind, said: "We've been waiting for this for over two years.
"It is a victory for thousands, bringing overwhelming relief to desperate people across the country.
"Finally the torment faced by elderly people forced to either spend their life savings on private treatment or go blind, is over."
Tom Bremridge, chief executive of the Macular Disease Society, welcomed the "long-awaited" guidance.
But he said: "Those responsible for NICE should be aware that during the cumbersome two-year review process 152 PCTs have individually had the power to decide whether to let patients go blind or to save their sight.
"The resulting stress and suffering has been cruel and unnecessary."
Age-related macular degeneration (AMD) comes in two forms - wet and dry - with the dry form being much more common. However, the wet type is more aggressive and is responsible for about 90% of blindness caused by the condition.
Almost 20,000 people a year are diagnosed with wet AMD in England.
NICE chief executive Andrew Dillon described Lucentis as an expensive drug - it costs more than �10,000 for each eye treated.
But he added: "That cost needs to be balanced against the likely cost savings.
"AMD results in reduced quality of life and increased risks of illness, particularly in relation to accidents, and psychological ill-health."
Mr Dillon said the cost-sharing deal could potentially mean significant savings for the NHS.
He expressed sympathy for PCTs facing pressure to fund many different expensive drugs from finite budgets.
Mr Dillon defended the length of time it took NICE to reach a final decision, but said it was important all parties had the opportunity to have their say.
However, he said: "I am genuinely sorry that it has taken us so long to get to this point. Lessons could be learned by everybody involved."
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