The WikiLeaks founder has been holed up inside the embassy's redbrick apartment in London's high-class Knightsbridge neighborhood for the past two months.
The UK Foreign and Commonwealth Office responded to the announcement by expressing disappointment in the decision and reiterating its commitment " to a negotiated solution that allows us to carry out our obligations under the Extradition Act."
UK officials previously warned that they could storm the embassy and forcibly remove Assange so he could be extradited to Sweden where he is wanted in connection with the alleged sexual assault of two women.
Assange has expressed fears that his extradition to Sweden could lead to charges related to WikiLeaks' controversial release of myriad confidential documents and diplomatic cables.
Despite the decision to grant Assange asylum, it remains unclear if he will be allowed safe passage out of the UK. In an official statement, Britain's charge d'affaires has already made it clear to Ecuador's government that it will refuse any request for safe passage.
[photo via AP]