The controversial product, called Palcohol, has won approval from a federal agency that clears the way for it to be sold in stores, the AP reports. The company says it should hit store shelves in a matter of months.
Lawmakers in many states have sought to ban Palcohol, saying it could facilitate underage drinking.
The powdered subtance, which is simply freeze-dried alcohol, becomes an alcoholic drink when combined with water.
The subtance comes in foil packets similar to Capri Sun juice packaging, making it easy to mix a drink on the go. One package of Palcohol has the same alcohol content as a shot.
Colorado is among the states that have moved to ban Palcohol.
"It can be a very dangerous thing," Chris Johnson, executive director of the County Sheriffs of Colorado, told the AP in December. He said he feared that kids might "sprinkle it on top of their Wheaties for breakfast," increasing the chances of alcohol poisoning.
Critics are also concerned that kids would snort powdered alcohol.
The founder of Palcohol, Mark Phillips, says snorting it would be "impractical."
In a video on the product, he said "Snorting it is VERY painful. It burns. A LOT. It hurts."
"There's absolutely no reason, even for an irresponsible person, to snort powdered alcohol," he added. "It's so painful to snort and it would take so long, its just impractical."