After decades of “demonisation”, psychiatrists will be able to prescribe MDMA and psilocybin in Australia from July this year.

The Therapeutic Goods Administration made the surprise announcement on Friday afternoon.

The drugs will only be allowed to be used in a very limited way, and remain otherwise prohibited, but the move was described as a “very welcome step away from what has been decades of demonisation” by Dr David Caldicott, a clinical senior lecturer in emergency medicine at Australian National University.

3,4-methylenedioxy-methamphetamine (MDMA) is commonly known as ecstasy, while psilocybin is a psychedelic commonly found in so-called magic mushrooms.

Both drugs were used experimentally and therapeutically decades ago, before being criminalised.

Specifically authorised psychiatrists will be able to prescribe MDMA for post-traumatic stress disorder, and psilocybin for treatment-resistant depression.

Ecstasy was developed as an appetite suppressant in 1912, but in the 1970s it started being used in therapy sessions in the US.

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It entered Australia in the 1980s as a party drug, and was criminalised in 1987.

Many species of magic mushrooms grow wild in Australia, but it is illegal to possess or supply psilocybin.

Caldicott said it had become “abundantly clear” that a controlled supply of both MDMA and psilocybin “can have dramatic effects on conditions often considered refractory to contemporary treatment” and would particularly benefit returned service men and women from the Australian defence force.

“The safe ‘re-medicalisation’ of certain historically illicit drugs is a very welcome step away from what has been decades of demonisation,” he said.

“In addition to a clear and evolving therapeutic benefit, it also offers the chanc