Westminster City Council says it has changed the usual rules to allow the memorial to be erected outside the current U.S. embassy in downtown London.
Normally, the council only permits statues in honor of people who have been dead for more than 10 years. Reagan died in 2004. But it says it has approved a request by the Reagan Memorial Fund Trust to recognize the former president's contribution to world politics.
The memorial will stand opposite a statue of Dwight D. Eisenhower.
Former U.S. ambassador Robert Tuttle said last year the embassy will be relocated from central London to a new site in the south of the city.