The relaxed measures, thrashed out by ministers during a Cobra meeting on Tuesday, also include a lifting of travel restrictions across the country between December 23 and 27.
Under the Christmas plan, each “exclusive" bubble will be able to mix freely at indoors at home, a place of worship, or outdoors over that five-day period.
However family trips to the pubs are off the cards, with existing rules for hospitality in the nations’ different tier systems still in force.
The deal will come as joyous news to millions of people across the country who had feared spending Christmas apart from their loved ones.
But as ministers urged people to nevertheless “think carefully” about their social interactions, Boris Johnson warned: “The virus doesn’t know its Christmas."
The Prime Minister said the agreement meant families would be able to reunite across the UK, but warned they must make a “personal judgment” about the risk of who they form a bubble with or if they visit elderly relatives.
In a video released on his Twitter account, he said: “Wherever you are in the country I urge you to keep up the incredible effort that you and everyone else have been making to keep pushing the virus down.
“Of course all this means that this year Christmas will be different. Many of us are longing to spend time with family and friends irrespective of our faith or background. And yet we can’t afford to throw caution to the wind.
All four UK nations have agreed that from the 23rd to the 27th of December, you will be able to form a Christmas bubble of no more than three households.
— Boris Johnson (@BorisJohnson) November 24, 2020
“The virus doesn’t know it’s Christmas and we must all be careful.
”He added: “I know this doesn’t equate to a normal Christmas and it won’t work for everyone and it is up to each of us to think carefully about how we use this special time-limited dispensation.”
Michael Gove, who chaired the Cobra meeting, said the Christmas plans would offer “hope for families and friends” after a “difficult” year of coronavirus restrictions.
He said: “The UK-wide agreement reached today will offer hope for families and friends who have made many sacrifices over this difficult year.
“We know that the Christmas period this year will not be normal, but following constructive discussions between the UK Government and the devolved administrations, families and friends will now have the option to meet up in a limited and cautious way across the UK should they wish.
“In coming to this agreement, we have listened to scientific and clinical advice on how best to minimise the risk and reach a balanced and workable set of rules that we hope will allow people to spend time together at this important time of year.”
Those travelling to and from Northern Ireland will be permitted an extra day on either side of the five-day window.
The agreement was signed off by Mr Gove, and the First Ministers of Northern Ireland, Scotland and Wales and the deputy First Minister of Northern Ireland.
In a joint statement, the ministers said that this year “cannot be a ‘normal’ Christmas".
“As 2020 draws to a close, we recognise it has been an incredibly difficult year for us all,” they said. "We have all had to make significant sacrifices in our everyday lives, and many religious and community groups have already had to change or forgo their customary celebrations to slow the spread of coronavirus and save lives.
"This cannot be a ‘normal’ Christmas. But as we approach the festive period, we have been working closely together to find a way for family and friends to see each other, even if it is for a short time, and recognising that it must be both limited and cautious.
"Even where it is within the rules, meeting with friends and family over Christmas will be a personal judgement for individuals to take, mindful of the risks to themselves and others, particularly those who are vulnerable.
“We need everyone to think carefully about what they do during this period, balancing some increased social contact with the need to keep the risk of increased transmission of the virus as low as possible. This is particularly important when considering those who are vulnerable, and before deciding to come together over the festive period we urge the consideration of alternative approaches such as the use of technology or meeting outside.”