The British government has approved the change in this country's universal jurisdiction law.
Nearly two years after Israeli Opposition leader Tzipi Livni was forced to cancel a trip to the UK when pro-Palestinian activists applied for a warrant for her arrest, the change was given the Royal Assent and became law.
The Police Reform and Social Responsibility Act means that the Director of Public Prosecutions will be required to give his consent when a group calls for an arrest warrant to be issued on the grounds of universal jurisdiction.
It emerged that the bill was down to one decisive vote. Liberal Democrat peer Lord Palmer was due to attend the Holocaust Educational Trust dinner on Wednesday evening, but chose to arrive at the event late and stay to cast his vote.
The Lords' vote was tied at 222-222, which under parliamentary rules meant that it could go through. Had Lord Palmer left early, it would have been defeated.
Matthew Gould, the Britsh ambassador to Israel, said it was an important amendment that would "ensure that the UK's justice system can no longer be abused for political reasons".
He said: "The change will ensure that people cannot be detained when there is no realistic chance of prosecution, while ensuring that we continue to honour our international obligations.
"The UK remains committed to ensuring that those guilty of war crimes are brought to justice. This will put an end to requests for warrants where there is no realistic chance of prosecution."
The coalition government pledged to change the law on universal jurisdiction when they took office in May 2010.
The Board of Deputies said visitors would now be protected "from malicious and politically motivated arrests".
"We are grateful to the government for delivering on their promise to pass this," they said. "We would like to acknowledge the efforts of the various communal groups, in particular the JLC, Board of Deputies and Friends of Israel groups that have helped to ensure the safe passage of the bill".
A spokesman for the Israeli embassy said: "The cloud that has hung over the UK’s ability to play a role in our area has been lifted, and should no longer cast a shadow over the diplomatic relationship between our two countries.
"We are hopeful that this correction will finally close that loophole which was abused by opportunistic groups promoting their sinister purposes. We would like to extend our thanks to the British government, in acting to end this absurdity."