The Government must now take tough and rapid measures, such as reducing traffic levels, rather than increasing road-capacity.
Nitrogen dioxide is the main pre-cursor for ground-level ozone causing major respiratory problems and leading to premature death.
City-dwellers are particularly exposed, as most nitrogen dioxide originates in traffic fumes.
European law sets limits on air pollution and the NOx limits should have been achieved by 1 January 2010 - unless an extension was granted until 1 January 2015.
FoE: 'get the traffic off our streets!'
Reacting to the news, Friends of the Earth Campaigner Jenny Bates said: "This much-needed legal action will hopefully force the Government to take urgent steps to end a national scandal that causes tens of thousands of people in the UK to die prematurely each year because of air pollution.
"The Government, Mayor of London and local authorities must now take tough and rapid measures, such as reducing traffic levels, rather than increasing road-capacity.
"This would cut air pollution and congestion, and make our towns and cities cleaner, healthier places for people to live and work."
16 zones of the UK affected
The UK Supreme Court has already declared that air pollution limits are regularly exceeded in 16 zones across the UK.
The areas affected are Greater London, the West Midlands, Greater Manchester, West Yorkshire, Teesside, the Potteries, Hull, Southampton, Glasgow, the East, the South East, the East Midlands, Merseyside, Yorkshire & Humberside, the West Midlands, and the North East.
The Court also noted that air quality improvement plans estimate that for London compliance with EU standards will only be achieved by 2025, 15 years after the original deadline, and in 2020 for the other 15 zones.
The UK is in clear breach of its legal obligations
EU legislation contains flexibility as regards the deadlines for returning air pollution to safe levels. Although the original deadline for meeting the limit values was 1st January 2010, extensions have been agreed with Member States which had a credible and workable plan for meeting air quality standards within five years of the original deadline - that is, by January 2015.
However the UK has not presented any such plan for the zones in question.
The Commission has therefore concluded that the UK is in breach of its obligations under the Directive, and a letter of formal notice has been sent. The UK now has two months to respond.
Nitrogen oxides like NO2 are emitted by road vehicles, shipping, power generation, industry and households. They are a key component in increased levels of ground-level ozone, which is very harmful to human health.
They cause acid rain, damaging plant and animal life in forests, lakes and rivers, and harming buildings and historical sites. They can also cause eutrophication, when an excess of nutrients such as nitrogen oxides and ammonia threatens biodiversity through the excessive growth of plants like algae.
Other parts of Europe also have problems with ambient air quality, and the Commission is currently taking action against 17 States in which there are serious air quality problems. To date, however, these other actions have concerned high levels of fine dust (PM10), as PM10 deadlines were to be met before the final deadlines for NO2.
Friends of the Earth's briefing on Air Pollution.