Jeremy Corbyn will grant Labour MPs a free vote on UK air strikes against so-called Islamic State in Syria.
Mr Corbyn's spokesman said the shadow cabinet had "accepted his recommendation" of a free vote.
He has also requested a two-day debate in the House of Commons beforehand.
BBC chief political correspondent Vicki Young said Mr Corbyn had wanted Labour to adopt a policy of opposition to air strikes, but was forced to back down by his shadow cabinet.
The leader was given a "thorough kicking" in the meeting, she was told.
Labour's internal party debate comes as David Cameron continues to try to build support for the extension of strikes from Iraq to Syria.
The prime minister has said he will only call a vote of MPs - to get the go ahead for the UK to launch bombing raids in Syria - when he is confident of winning.
To be confident of winning he needs enough Labour MPs to back military intervention to make for Conservative MPs who oppose the action.
The UK parliament's third largest party - the SNP - opposes bombing IS in Syria, with leader Nicola Sturgeon criticising Labour's stance, tweeting that "a party that says it is anti-air strikes has just made a vote for air strikes more likely".
A number of Labour frontbenchers are believed to support Mr Cameron's calls for air strikes.
But ahead of the shadow cabinet meeting, the Labour leadership said 75% of party members it polled over the weekend had opposed bombing.
The survey was called into question with one Labour MP calling it a "rather vague consultation".
A free vote means Labour MPs would not be ordered to vote with the leadership. Mr Corbyn had previously suggested he wanted to agree a united position within his shadow cabinet and for Labour to approach the question "as a party".
But he was warned of resignations from his front bench if he attempted to force his party to vote with him.
No date has been set for a Commons vote on air strikes - Defence Secretary Michael Fallon said the government was "continuing to build" its case.
Mr Corbyn has written to Mr Cameron requesting a two-day Commons debate to be held ahead of any vote.
A single day, the Labour leader said, "would inevitably lead to important contributions being curtailed".
A statement from Mr Corbyn's office said the shadow cabinet had "decided to support the call for David Cameron to step back from the rush to war and hold a full two-day debate in the House of Commons on such a crucial national decision".
Labour "agreed to call David Cameron to account on the unanswered questions raised by his case for bombing", including how it would bring about a negotiated settlement in Syria and which ground troops would seize territory vacated by IS, it added.