The US Food and Drug Administration has approved the use of Xifaxan as a treatment for hepatic encephalopathy.
The antibiotic, made by Salix Pharmaceuticals, was already passed for use in cases of so-called “travellers diarrhoea”, which is caused by the E.Coli germ.
The move comes after research published in the New England Journal of Medicine showed the drug reduced the risk of recurrent hepatic encephalopathy by more than half.
Lead author Dr Nathan Bass said 299 volunteers had participated in the trial.
The condition, a debilitating liver disease, can cause confusion and memory problems. Some 50,000 people are admitted to hospital each year in the US with the disease.
Salix bosses are hopeful the treatement will be widely available by May.
Copyright Press Association 2010