Updated - London Mayor Boris Johnson said this evening that he would back Britain's exit from the European Union in a June 23 referendum.
Johnson said Prime Minister David Cameron had not achieved fundamental reform of the European Union.
"I will be advocating Vote Leave .... because I want a better deal for the people of this country to save them money and to take back control," Johnson said outside his north London home.
His announcement - made outside his London home - is a huge boost for the "out" campaign potentially giving them a popular figurehead able to connect with voters in a way few other Westminster politicians can manage.
At the same time, it comes as a bitter blow for Cameron who had long believed that his old rival from their days at Eton and Oxford would ultimately fall in behind his EU re-negotiation package.
Johnson said the decision to oppose Cameron had been "agonisingly difficult" and praised his renegotiation effort, but that ultimately the reforms agreed in Brussels had fallen far short of meaningful change on issues like sovereignty.
"I don't see how, having worried about this issue for quite so long and having fulminated for quite so long about the lack of democracy in the EU, I can then pass up what I think will be the only chance any of us have in our lifetimes to put an alternative point of view," he said.
This morning Cameron issued a last-ditch appeal to Mr Johnson not to join the campaign for Britain to leave the European Union.
Mr Cameron said it would be a "wrong step" for Mr Johnson to link up with Ukip leader Nigel Farage and Respect's George Galloway in the "out" camp.
"I would say to Boris what I say to everybody else, which is that we will be safer, we will be stronger, we will be better off inside the EU," the Prime Minister told BBC1's The Andrew Marr Show.
"I think the prospect of linking arms with Nigel Farage and George Galloway and taking a leap into the dark is the wrong step for our country.
"If Boris and if others really care about being able to get things done in our world, then the EU is one of the ways in which we get them done."
Mr Cameron warned that while leaving the EU could create the impression that Britain was reclaiming its own sovereignty, in practice it would be an "illusion".
"If Britain were to leave the EU that might give you a feeling of sovereignty but you have got to ask yourself 'is it real?'," he said.
"Would you have the power to help businesses and make sure they weren't discriminated against in Europe? No you wouldn't. Would you have the power to insist that European countries share with us their border information so we know what terrorists and criminals are doing in Europe? No you wouldn't.
"If suddenly a ban was put on for some bogus health reasons on one of our industries, would you be able to insist that that ban was unpicked? No you wouldn't.
"You have an illusion of sovereignty but you don't have power, you don't have control, you can't get things done."
While Mr Cameron acknowledged that it was possible that Britain could have a trade deal with the EU if it left, he pointed to the example of Canada, which had been negotiating for seven years and still did not have full access to European markets.
"If we leave: seven years, potentially, of uncertainty, and at the end of that process you still can't be certain that our businesses will have full access to the market. So it could cost jobs, it could mean overseas businesses not investing in Britain. It would be a step into the dark," he said.
"The weakness of the Leave campaign is, I think, they forget that even if you leave the EU still exists, it is still on your doorstep."
At a time of great international uncertainty - with the threats of Russian expansionism and Islamic State terrorism - Mr Cameron said there was "strength in numbers".
"In the end this is a hard-headed calculation about what is best for Britain," he said.
"In a world where you have got Putin to the east and Isil-Daesh to the south, how do you stay strong? By sticking with your neighbouring countries, your partners and your friends."