The Ministry of Defence says it will abandon deep-diving experiments which involve inducing decompression sickness in live goats.
The respiratory physiology of goats 'closely resembles' that of humans.
The animals were used to see what the likely risk of "the bends" would be following escape from a submarine at varying depths under water.
The information would help crews judge whether it would be safer to abandon a stricken vessel or wait to be rescued.
Animal rights campaigners say the move will "end decades of animal suffering".
More than 400 such experiments have taken place since 2000.
However, the tests were suspended in March 2007 while a review committee of six experts examined alternative methods, such as computer-modelling techniques to simulate the effects of the "bends".
Now the MoD says there is no further need for the animal testing.
The "bends" - the often deadly effect of nitrogen bubbles in the bloodstream - is the sickness caused when divers rise to the surface too quickly.
Staff welfare 'paramount'
It can result in a loss of balance and breathing difficulties and, in the most serious cases, paralysis and death.
During the MoD tests in Gosport, goats were subject to various pressures in a hyperbaric chamber.
Goats were used because their respiratory physiology is said to closely resemble that of humans.
Defence Secretary Des Browne said the MoD owed a duty of care to its submarine staff and "the welfare of its personnel is paramount".
However, the aim of the tests has "now been achieved".
"The review has concluded that the remaining associated areas of uncertainty in submarine escape and rescue relate to events that are considered highly unlikely and do not therefore need to be addressed by means of animal testing," he said.
"The MoD has endorsed these recommendations and as a result, it has no immediate need to continue animal testing of this type."
The non-animal medical research charity the Dr Hadwen Trust, which specialises in humane alternatives to animal testing, welcomed the decision.
Spokeswoman Wendy Higgins said: "This is a victory for commonsense and animal protection which sees an end to decades of animal suffering.
"It is regrettable but inevitable that warfare causes human suffering, but it is totally unethical that we should add to this the unnecessary suffering of innocent animals."
Mike Hancock, the Lib Dem MP for Portsmouth South, said he was "absolutely delighted" with the MoD decision.
"I hope that this will set an example to other government departments and private companies to also seek replacing animal experiments as a matter of urgency," he said.
The MoD said it only conducted animal testing "where absolutely necessary" and all work involving animals is carried out in strict accordance with the requirements of the Animals (Scientific Procedures) Act 1986.