Kosovo's parliament has unanimously endorsed a declaration of independence from Serbia, in an historic session.
The declaration, read by Prime Minister Hashim Thaci, said Kosovo would be a democratic country that respected the rights of all ethnic communities.
The US and a number of EU countries are expected to recognise Kosovo on Monday.
Serbia's PM denounced the US for helping create a "false state". Serbia's ally, Russia, called for an urgent UN Security Council meeting.
Correspondents say the potential for trouble between Kosovo's Serbs and ethnic Albanians is enormous.
Serbia's Prime Minister Vojislav Kostunica blamed the US which he said was "ready to violate the international order for its own military interests".
"Today, this policy of force thinks that it has triumphed by establishing a false state," Mr Kostunica said.
"Kosovo is Serbia," Mr Kostunica said, repeating a well-known nationalist Serb saying.
Search for equality
The declaration was approved with a show of hands. No-one opposed it.
"We have waited for this day for a very long time," Mr Thaci told parliament before reading the text, paying tribute to those who had died on the road to independence.
"The independence of Kosovo marks the end of the dissolution of the former Yugoslavia," the prime minister said - Kosovo was a unique case that should not set a precedent.
He said it would be built in accordance with the UN plan drawn by former Finnish President, Martti Ahtisaari - at the end of negotiations which did not produce a deal.
The international military and civilian presence - also envisaged by the Ahtisaari plan - was welcome, he added.
There should be no fear of discrimination in new Kosovo, he said, vowing to eradicate any such practices - and conveying a similar message in Serbian. President Fatmir Sejdiu had a similar pledge - also addressed in Serbian.
The declaration was then signed by all the MPs present.
Kosovo's top leaders are due to go to a sports hall later where the Kosovo Philharmonic Orchestra is expected to play Beethoven's Ode to Joy.
They are also due to sign their names on giant iron letters spelling out the word "newborn" which was to be displayed in Pristina.
Fireworks and street celebrations will follow. Thousands of people have poured onto the streets.
Some ethnic Albanians, who make up the majority of Kosovo's population, earlier laid flowers on the graves of family members killed by Serbian security forces during years of conflict and division.
The CNews's Nick Thorpe in the flashpoint town of Mitrovica says local and UN police, as well as the Nato troops, are maintaining a high profile to reassure all the citizens of Kosovo that they have nothing to fear.
Limitations
The declaration approved by Kosovo's parliament contains limitations on Kosovan independence as outlined in Mr Ahtisaari's plan.
Kosovo, or part of it, cannot join any other country. It will be supervised by an international presence. Its armed forces will be limited and it will make strong provisions for Serb minority protection.
Recognition by a number of EU states, including the UK and other major countries, will come on Monday after a meeting of EU foreign ministers in Brussels, says the CNews's Paul Reynolds.
The US is also expected to announce its recognition on Monday.
Three EU states - Cyprus, Romania and Slovakia - have told other EU governments that they will not recognise Kosovo, says our correspondent.
Russia's foreign ministry has indicated that Western recognition of an independent Kosovo could have implications for the Georgian breakaway provinces of Abkhazia and South Ossetia.
The UN has administered Kosovo since a Nato bombing campaign in 1999 drove out Serb forces.
The declaration, read by Prime Minister Hashim Thaci, said Kosovo would be a democratic country that respected the rights of all ethnic communities.
The US and a number of EU countries are expected to recognise Kosovo on Monday.
Serbia's PM denounced the US for helping create a "false state". Serbia's ally, Russia, called for an urgent UN Security Council meeting.
Correspondents say the potential for trouble between Kosovo's Serbs and ethnic Albanians is enormous.
Serbia's Prime Minister Vojislav Kostunica blamed the US which he said was "ready to violate the international order for its own military interests".
"Today, this policy of force thinks that it has triumphed by establishing a false state," Mr Kostunica said.
"Kosovo is Serbia," Mr Kostunica said, repeating a well-known nationalist Serb saying.
Search for equality
The declaration was approved with a show of hands. No-one opposed it.
"We have waited for this day for a very long time," Mr Thaci told parliament before reading the text, paying tribute to those who had died on the road to independence.
"The independence of Kosovo marks the end of the dissolution of the former Yugoslavia," the prime minister said - Kosovo was a unique case that should not set a precedent.
He said it would be built in accordance with the UN plan drawn by former Finnish President, Martti Ahtisaari - at the end of negotiations which did not produce a deal.
The international military and civilian presence - also envisaged by the Ahtisaari plan - was welcome, he added.
There should be no fear of discrimination in new Kosovo, he said, vowing to eradicate any such practices - and conveying a similar message in Serbian. President Fatmir Sejdiu had a similar pledge - also addressed in Serbian.
The declaration was then signed by all the MPs present.
Kosovo's top leaders are due to go to a sports hall later where the Kosovo Philharmonic Orchestra is expected to play Beethoven's Ode to Joy.
They are also due to sign their names on giant iron letters spelling out the word "newborn" which was to be displayed in Pristina.
Fireworks and street celebrations will follow. Thousands of people have poured onto the streets.
Some ethnic Albanians, who make up the majority of Kosovo's population, earlier laid flowers on the graves of family members killed by Serbian security forces during years of conflict and division.
The CNews's Nick Thorpe in the flashpoint town of Mitrovica says local and UN police, as well as the Nato troops, are maintaining a high profile to reassure all the citizens of Kosovo that they have nothing to fear.
Limitations
The declaration approved by Kosovo's parliament contains limitations on Kosovan independence as outlined in Mr Ahtisaari's plan.
Kosovo, or part of it, cannot join any other country. It will be supervised by an international presence. Its armed forces will be limited and it will make strong provisions for Serb minority protection.
Recognition by a number of EU states, including the UK and other major countries, will come on Monday after a meeting of EU foreign ministers in Brussels, says the CNews's Paul Reynolds.
The US is also expected to announce its recognition on Monday.
Three EU states - Cyprus, Romania and Slovakia - have told other EU governments that they will not recognise Kosovo, says our correspondent.
Russia's foreign ministry has indicated that Western recognition of an independent Kosovo could have implications for the Georgian breakaway provinces of Abkhazia and South Ossetia.
The UN has administered Kosovo since a Nato bombing campaign in 1999 drove out Serb forces.
