The agency gave the green light to Compass Pathways, a life sciences firm, to perform clinical trials using psilocybin.
Occurring naturally in magic mushrooms, psilocybin is a hallucinogenic which can cause feelings of euphoria.
According to a statement by Compass Pathways, 216 patients with treatment-resistant depression will take part in the phase two trial across 12 to 15 research sites in North America and Europe, which will start in the U.K. later this month.
Researchers will dose participants with psilocybin while they receive psychological support. The firm hopes more countries will join the project as and when respective health bodies approve the use of psilocybin for clinical trials.
Tracy Cheung, from Compass Pathways, told Newsweek the clinical trial will be the largest ever conducted into psilocybin therapy.
"If our studies are successful, we could be applying for marketing authorization in two to three years," she said, describing depression as "a huge unmet need with 300 million patients worldwide; 100 million of these have treatment-resistant depression and don’t respond to existing treatments."
The approval comes amid what is known as the psychedelic renaissance. Growing evidence suggests psychedelic substances, such as psilocybin, LSD, MDMA, ayahuasca and peyote ibogaine, could be used to treat mental illnesses such as depression, anxiety and post-traumatic stress disorder in a controlled medical setting. Researchers are also exploring the use of ketamine, which is an anesthetic rather than a hallucinogenic.
A 2017 study published in the journal Scientific Reports showed depression patients who took psilocybin in a controlled, clinical setting saw their symptoms ease weeks after treatment. The team at Imperial College London, U.K. believe the compound reset the participants' brain circuits. However, they acknowledged the trial of 20 people was small, and further research is needed before the compound can be prescribed by doctors.
A separate 2016 study by researchers at the New York University and Johns Hopkins University showed a single dose of psilocybin decreased symptoms of anxiety in cancer patients for eight months when compared to a placebo. The findings were published in The Journal of Psychopharmacology.
Psychedelics are believed to help parts of the brain that generally have little connection to communicate, and lower activity in the regions which do, researchers at the University of Cambridge wrote on The Conversation.
Magic mushrooms are not life threatening unless large amounts or strong batches are taken, according to the Alcohol and Drug Foundation, but researchers do not condone illegal drug use. Taking magic mushrooms without the supervision of medical professionals carries short term risks such as vomiting, diarrhea, loss of muscle control, psychosis, and seizures. Even years later, some takers experience flashbacks of hallucinations.
Berkeley University of California warned on its website: "It's important to keep in mind that the conditions in these studies were strictly controlled and the patients meticulously monitored during treatment," adding: "These drugs should never be tried outside of medical monitoring."
This article has been updated with comment from Tracy Cheung.