Germany's top court has declared unconstitutional a rule requiring parties to win at least 3% of the vote to enter the European Parliament.
The government lowered the threshold from 5% last year but the Federal Constitutional Court in Karlsruhe said the threshold should be abolished.
The ruling paves the way for several smaller parties including the far-right NPD to win seats in the May 2014 vote.
The party has often been accused of promoting neo-Nazi ideology.
Nineteen smaller parties, including the Free Voters, Pirates and Ecological Democratic Party, had argued that the 3% hurdle was unfair and in the interests of the larger parties.
But the main parties in the Bundestag insisted it was in order to prevent political fragmentation in the Brussels parliament.
Germany's national parliament maintains a 5% threshold, because of the fragmentation of parties during the pre-World War Two Weimar Republic which failed to stop Adolf Hitler's rise to power.
The lower 3% threshold was agreed by the Bundestag after the higher hurdle was struck down by the constitutional court at the end of 2011.
The court's judges ruled by a margin of five to three on Wednesday that a threshold was no longer necessary in order to "preserve the European Parliament's ability to function".
Most countries in the 28-member EU have no threshold at all, including the UK. But eight member states do.
Italy and Austria have a 4% threshold while Poland and France maintain a 5% hurdle.
The anti-euro Alternative for Germany (AfD) party has been polling well above the threshold so is unlikely to have been affected by Tuesday's ruling.
If there had been no threshold in Germany at the last European elections, the Free Voters would have won two seats and the far-right National Democratic Party (NPD) one seat. Single seats would have also gone to the Pirates and several other fringe groups such as the animal rights and pensioners parties.
Politicians from Chancellor Angela Merkel's CDU party criticised the ruling, with one member - Steffen Bilger - saying it weakened Germany's position in Europe.