"While I know that this is a delicate issue, I think that this is a fair and creative solution," Prime Minister Benjamin Netanyahu told reporters on Sunday
Many Jews throughout the diaspora rejoiced.
"Today the government of Israel recognized the diversity of Judaism around the world and partnered with us to co-create a space where all can pray at Judaism's most holy site," said Rabbi Steven Wernick, CEO of the United Synagogue of Conservative Judaism, which has been lobbying for a shared prayer space for more than two decades.
The new prayer space will be along the southern edge of the Western Wall, separated from the current Western Wall plaza prayer site where men and woman pray separately. It will take about 12 to 18 months to complete, Wernick estimates.
In 2000, Israel created an informal prayer space for egalitarian prayer separated from the Western Wall plaza. Sunday's decision will see this current site becoming a permanent location. More than 50,000 people attended prayers at the makeshift site in 2015, according to the United Synagogue of Conservative Judaism. In comparison, more than 3 million people visited the Western Wall plaza in 2013, according to Israel's Central Bureau of Statistics.
Rabbi Shmuel Rabinovich of the Western Wall Heritage Foundation expressed outrage at the government decision.
"Following a media campaign by a small but inflammatory group called Women of the Wall, the Wall has gone from a being a place of unity to an arena of constant scuffling. The blasphemy that this group and its supporters have perpetrated is so horrendous that it will take years to fix. We must do everything to leave this horrible affair behind us."
Women of the Wall is a feminist advocacy group working for equal prayer rights for women, including the wearing of a yarmulke and prayer shawls normally reserved for men.
The Western Wall, known as the Kotel in Hebrew, is one of the holiest sites in Judaism because it is the closest site at which Jews can pray to where they believe the Jewish Temple stood 2,000 years ago. Orthodox and ultra-Orthodox Jews oppose men and women praying together because they believe it is against Jewish law, known as halakha.