The controversial M4 bus lane is to be scrapped at the end of the year.
All motorists will again be able to use the 3.5-mile (5.6km) lane, which operates on the London-bound carriageway from near Heathrow Airport.
Transport Secretary Philip Hammond confirmed the move, saying the bus lane was "not effective".
It will be suspended from 24 December for 18 months when the lane comes back into use for the Olympics, after which it will be scrapped for good.
The motorway's third lane between junctions three and two - which carries about 7% of London-bound traffic - is reserved for buses, licensed black taxis and motorcycles.
'Piece of folly'
Speaking to BBC Radio 5 Live, Mr Hammond argued that the bus lane was symbolic of Labour's ''war on the motorist''.
He said: "Well it was a piece of folly wasn't it?
"Introduced 10 years ago, predicted not to be effective and in fact that's been the experience of most people.
"They sit sweltering in traffic queues watching an empty lane by the side of them with just the occasional vehicle going down it."
The bus lane was introduced by then Transport Secretary John Prescott in 1999.
It became known by some as the "Blair lane" after the former prime minister used it to avoid heavy traffic.
Mr Prescott responded to Mr Hammond's comments in his blog, saying: "Studies by the independent Transport Research Laboratory proved the M4 bus lane succeeded in reducing traffic jams.
"This is actually just another smokescreen for the beginning of the deepest and most savage public sector cuts Britain has ever seen."
RAC Foundation director Professor Stephen Glaister said: "Most drivers on the M4 will wonder why this decision has taken so long.
"Road capacity is in short supply and to have an underused lane like this has made little sense."
But the Licensed Taxi Drivers Association (LTDA) said it was disappointed with the move.
Bob Oddy, general secretary of the LTDA, said: "Thousands of cab journeys are made from Heathrow every day and the vast majority of those come into London.
"This means we won't be able to use that lane and it will be a great inconvenience to us and to our customers who, if they get caught in traffic, will end up paying more money."
The decision to restore the lane for the Olympics is to honour an agreement made regarding the Olympic Route Network (ORN).
Roads on the ORN can only be used by athletes, Olympic officials and journalists and the system is designed to ensure speedy journeys between venues.
Full details of the scrapping of the lane are due to be revealed at the Conservative Party conference on Monday.