The decision will mean thousands of nursery practitioners with Level 1 and 2 Early Years Educator (EYE) qualifications will now be able to go on to study the Level 3 qualification without first having to achieve a GCSE grade C or above in maths and English.
Purnima Tanuku, chief executive of the National Day Nursery Association (NDNA), says the charity had "campaigned on this issue for a long time".
"This means that nursery practitioners won’t face having to put their career progression on hold to get their GCSE grades before they can move forward to further study.
“Now they will be able to study for their GCSEs alongside their childcare qualification. It is also good news for nurseries who will be able to plan the career development of their staff more easily.”
Rules requiring GCSE as an entry requirement to study Level 3 EYE were due to come into effect today.
But on 31 July, the Skills Funding Agency announced learners can achieve the GCSE qualifications by the time they have completed their studies.
NDNA's workforce survey, released last month, reported that half of nurseries were struggling to find candidates with the required qualifications.
Liz Bayram, chief executive of the Professional Association for Childcare and Early Years, said: "This development strikes the right balance between ensuring the high standards children deserve and supporting individuals to enter the profession or, for many already in childcare, to progress beyond Level 2."
Neil Leitch, chief executive of the Pre-school Learning Alliance, described the news as "encouraging".
He said: "Many learners had expressed concerns to us that the previous GCSE requirements would be a serious barrier to them progressing to Level 3, and so it is very encouraging to see that the government has listened, and responded positively, to sector feedback on this issue."
In an email to organisations in the sector, the Department for Education acknowledged that this has been “causing difficulties for employers in the early years sector”.
It said that the decision to drop the GCSE entry requirements came after discussions with several organisations in the sector, as well as advice provided to the minister.
The changes will also apply to childminders, who can also now take the EYE without having the required GCSE grades.
The same requirements for applicants undertaking the course alongside an early years apprenticeship were announced last month.