"We no longer advise against travel to Jammu and Srinagar, nor against travel on the Jammu to Srinagar highway," the British High Commission said in an update on its website posted Tuesday.
Srinagar is Kashmir's summer capital and home to the famous Dal Lake, while Jammu serves as the winter capital.
Muslim-majority Kashmir, set in the foothills of the Himalayas, is divided between India and Pakistan along the heavily-militarised Line of Control border.
It was plagued by violence for decades as local militants fought for the region to become independent or part of Pakistan, but unrest has fallen sharply in recent years and domestic Indian tourism has boomed.
"The improvements in the security situation has led us to lift the advisory against UK citizens travelling to both cities, Jammu and Kashmir," British High Commissioner James Bevan said.
Bevan said the decision to lift the warning would boost foreign tourism and benefit the local economy.
Britain, which first issued a Kashmir travel advisory in 1995, still advises against travel to other parts of the region except for Ladakh.
The United States strongly recommends its citizens avoid travel to Kashmir.