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Among the concessions, Microsoft has agreed to supply open source vendors with information on its operating systems to ensure future interoperability, while reducing the royalties payable for this information to a one-off payment of €10 000.

The software giant has also agreed to reduce royalties for its worldwide licences including patents from 5.95% to 0.4%, less than 7% of the royalty originally claimed by the company.

The decision represents a major turning point for Microsoft, which has spent three years claiming it wants to comply with the EU's ruling but singularly failing to meet the standards for compliance outlined by the Commission.

Its reluctance earned it a fine of €280.5 million in 2006, and the promise of further heavy fines should it

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not give in to the ruling.

"I welcome that Microsoft has finally undertaken concrete steps to ensure full compliance with the 2004 Decision," says EU Competition Commissioner Neelie Kroes.

"It is regrettable that Microsoft has only complied after a considerable delay, two court decisions, and the imposition of daily penalty payments.

"However, the measures that the Commission has insisted upon will benefit computer users by bringing competition and innovation back to the server market.

"The Commission will remain vigilant to ensure that Microsoft continues to respect its compliance obligations and does not engage in other anti-competitive behaviour. I have always said that open source software developers must be able to take advantage of this remedy: now they can."

Microsoft signalled the softening of its stance earlier this month when it withdrew its appeal against South Korea's antitrust ruling.

Read how Microsoft has caused a furore by installing desktop search on XP through its automatic update service.