For years, the Orthodox church in Ukraine has been split into three main branches: the originally canonical Ukrainian Orthodox Church of the Moscow Patriarchate (UOC-MP) and the non-canonical Ukrainian Orthodox Church of the Kiev Patriarchate and Ukrainian Autocephalous Orthodox Church.
The decree, granting "autocephaly", was signed by Ecumenical Patriarch Bartholomew at a service with the head of the Ukrainian church Metropolitan Epifaniy and President Petro Poroshenko in St George's Cathedral in Istanbul.
The move has provoked a furious response in Russian Federation, where the Church has broken off links, deepening a split in the worldwide Orthodox Church.
The decision may also lead to a lasting schism in the global Orthodox movement, says the BBC's Jonah Fisher in Kiev, Ukraine.
Istanbul remained the centre of the Orthodox Church after the Muslim Ottoman Turks occupied the city, then known as Constantinople, in the 15th Century.
"Dear Ukrainians, this is a historic event!"
It has been brought back to Ukraine on Orthodox Christmas Eve. On Monday - Christmas Day - a celebration and rally will take place in central Kiev.
Bartholomew's decision in October to grant the Ukrainian church autocephaly, or independence, infuriated Moscow and the Russian church severed ties with Istanbul, the center of the Orthodox world.
What is the dispute all about?
Criticism continued Saturday when a spokesman for the Russia-affiliated church in Ukraine, Vasily Anisimov, said, "We consider these actions to be anti-canonical". If they decide at a general meeting that they want to voluntarily join the newly created Orthodox Church of Ukraine, they will be accepted into the structure of the single Orthodox Church of Ukraine.
The row over independence for the Ukrainian church is seen as a proxy for political tensions between Moscow and Kiev.
Kyiv has been pushing for a church free from Moscow's influence, a campaign intensified after Russia's 2014 annexation of Crimea and amid the ongoing conflict in eastern Ukraine. Under the Tomos, the new church's jurisdiction will be restricted to Ukraine and it will not be authorized to appoint bishops and establish its parishes overseas, making it effectively dependent on Constantinople.
The move has dealt a huge blow to Moscow's spiritual authority in the Orthodox world, prompting it to cut all ties with the Constantinople Patriarchate in protest.