A public inquiry would likely determine if Russian leaders ordered the death of Litvinenko, a former KGB agent turned informant. In 1998, Litvinenko clashed with President Vladimir Putin over allegations of corruption in the FSB -- the KGB successor led by Putin -- which Litvinenko claimed and Putin refused to investigate.
Litvinenko escaped with his family to Britain in 2000, and in 2006 was poisoned by tea laced with a radioactive isotope, which he drank at a London hotel. In a deathbed statement, Litvinenko, 43, blamed Putin for the poisoning.
British authorities seek the extradition of Andrei Lugovoi -- a former KGB officer and now a Russian Parliament member -- on murder charges.
Prior plans to publicly investigate the matter in Britain were stalled by questions of national security.
In the announcement Tuesday, British Home Secretary Theresa May said Sir Robert Owen -- a senior judge involved in the legal process since 2006 -- will preside over the inquiry.
Previous court filings indicate Owen believes the British government has or had documents establishing "a prima facie case as to the culpability of the Russian state in the death of Alexander Litvinenko."
The opening of the inquiry is seen as a rebuke to Putin, at a time when he faces international criticism over Russian foreign policy regarding Crimea, Ukraine, and the crash of Malaysia Airlines 17 over Ukrainian territory held by pro-Russian separatists.