The Orthodox Church of Ukraine was granted independence by the Ecumenical Patriarch in Istanbul, who signed the decree on Saturday.
It marks an historic split from Russia, which Ukrainian leaders see as vital to the country's security.
Bartholomew I, the Ecumenical Patriarch in Istanbul, signed the document while attending a service with the head of the Ukrainian church Metropolitan Epifaniy and President Petro Petroshenko at St George's Cathedral within the Ecumenical Patriarchate in Istanbul.
The decree, known as "Tomos", might create a schism in the Orthodox movement worldwide: it will force Ukrainian clerics to choose between the Russian-supported Ukrainian churches and the new church.
The Ukrainian church has been under Moscow's patriarchate for centuries, but since Ukraine became independent in 1991, tensions have accumulated and intensified in 2014 with the Russian annexion of Crimea.
“The pious Ukrainian people have awaited this blessed day for seven entire centuries,” Bartholomew I said. He added that the Ukrainian people could now enjoy “the sacred gift of emancipation, independence and self-governance, becoming free from every external reliance and intervention.”
The event was broadcast live on Ukrainian television.