"From now onward, Kosovo is proud, independent, sovereign and free," Kosovar Prime Minister Hashim Thaci said before reading the declaration of independence on Sunday afternoon.
"We will face a lot of difficulties, but we will be a united nation with a very clear European vision," he added.
All 109 deputies then voted in favor of the 12-point declaration of independence.
Also addressing the parliament, Kosovar President Fatmir Sejdiu stated that Pristina declares its independence "in front of and with the blessing of the world".
In a bid to reassure the some 120,000 Serbs of Kosovo, both the president and the premier stressed that the new state will be "a country for all its citizens. We are building a Kosovo where there will be equal rights for everybody," regardless of their ethnic belonging.
An autonomous Serbian province within the former Yugoslavia, Kosovo has been under UN governance since 1999, when NATO troops intervened to stop a crackdown by the then president of Serbia Slobodan Milosevic's forces on the majority ethnic-Albanian population.
The newly proclaimed state will be extensively based on the provisions of a UN plan foreseeing independence largely supervised by the international community.
In a TV statement, Serbian president Boris Tadic said that "Serbia will never recognize an independent Kosovo," and vowed to use "all peaceful, diplomatic and legal means to annul this illegal act of Kosovo's interim bodies".
Prior to this, prime minister Vojislav Kostunica accused the US and the EU of supporting the secession of the province which Serbians consider as the historic and religious cradle of their country.
The United States has "humiliated" the EU and "forced [it] to discard its basic principles. Europe bowed its head before America, and it will be held responsible for all the consequences that will arise from Kosovo's independence," he said.
"It is Europe that has been humiliated, not Serbia," he added, concluding that "as long as the Serb people exist, Kosovo will be Serbia."
A few hours after Kosovo's proclamation of independence, and while thousands were celebrating in Pristina, some 2,000 angry protesters gathered in front of the American embassy in Belgrade, Reuters reports.
The embassy of current holder of the EU presidency, Slovenia, also came under attack, with protesters breaking a police cordon around the building, tearing and burning flags from the balcony and ripping up furniture inside, according to Serbian news site B92.net.
At least 60 people - 30 protesters and 30 policemen - were reportedly injured in the clashes.
Meanwhile, hand grenades were thrown at EU and UN buildings in the Kosovar city of Mitrovica, populated by Albanians in the south and Serbs in the north.
In this context, EU foreign ministers are meeting in Brussels today (18 February) and will try to produce a common reaction to the declaration of independence.
The ministers are expected to hold long and heated debates and to agree to "take note" of the creation of the Republic of Kosovo, leaving it to individual member states whether or not they recognize the new state.
But member states are far from being unanimous on the issue, where every word of a possible EU position is seen as sensitive.
At the moment, four countries are not expected to recognize Kosovo – Spain, Romania, Cyprus and Greece.
Slovakia is "for the time being" not considering recognizing it either, but "will closely follow the development of the situation in Kosovo and the region, as well as the steps of the international community. Only after evaluating the situation Slovakia will decide on its further steps", according to a statement by the Slovak foreign ministry.
Other countries, such as Bulgaria, have refused to reveal their official position before today's meeting.
Others still, including the UK, France and Germany, are reportedly ready to recognize Kosovo's independence in the near future.
French foreign minister Bernard Kouchner – and the UN's first special representative in Kosovo in 1999 – on Sunday wished Kosovo "good luck" and said this development of events was a "success for the international community and Europe".
Meanwhile, Washington welcomed Kosovo's "clear commitment" to carry out the provisions of the UN plan, judging it "the best way for both sides to move forward," State Department spokesperson Sean McCormack said.
In contrast, Russia strongly condemned the declaration of independence, saying it breached Serbia's territorial integrity, and called for an emergency meeting of the UN Security Council to denounce what it sees as an illegitimate act.