The report's release comes days after scientists cautioned that the view that e-cigarettes aren't damaging should be treated with care.
"Concerns that e-cigarettes could be a gateway to conventional smoking, including for young non-smokers, have not materialised".
Public Health England (PHE) has estimated that e-cigarettes are at least 95% less harmful than smoking.
Nearly three million people in the United Kingdom use e-cigarettes, roughly 470,000 of whom are using them to help them quit, with tens of thousands doing so successfully each year.
The committee of MPs said that while "uncertainties" remain about the long-term health impact of the devices, they present "an opportunity to significantly accelerate already declining smoking rates".
It also called for incentives to promote them as a less harmful option, in the form of lower levels of taxation, a relaxation of curbs on their use in public places and a review of approval systems for prescribing them as quit-smoking products.
'If used correctly, e-cigarettes could be a key weapon in the NHS stop-smoking arsenal'.
Mr Lamb said medically licensed e-cigarettes "would make it easier for doctors to discuss and recommend them as a stop-smoking tool to aid those quitting smoking".
They also said the government should look again at regulations limiting e-juice refill strengths and tank sizes which were brought in by the EU.
Smoking remains a national health crisis and the Government should be considering innovative ways of reducing the smoking rate.
"E-cigarettes are a proven stop smoking tool and, while uncertainties undoubtedly remain about their long-term health impact, failing to explore the use of e-cigarettes could lead to the continued use of conventional cigarettes - which now kill around 79,000 people in England every year".
But the British lawmakers concluded that the balance clearly favored vaping over tobacco smoking and it urged greater regulatory leniency to allow advertising of the relative benefits of e-cigarettes.
"There is no evidence that they are acting as a gateway into smoking for young people".
The report comes days after a Professor David Thickett, of the University of Birmingham's Institute of Inflammation and Ageing, warned the public "must be aware that these devices are not harmless".
A study here this week, for example, found that e-cigarette vapor may cause adverse changes in lung cells.
He said: "It has been suggested electronic cigarettes are safer than traditional cigarettes, and this narrative is increasingly supported by tobacco companies that have established research institutes devoted to generating supportive data".
Reacting to the STC's report Simon Capewell, Professor in Public Health and Policy from Liverpool University, told the Daily Mail: "The committee has concentrated exclusively on "experts" who are e-cig champions".
The STC's report also said an end to the ban on "snus", an oral tobacco product which is illegal in the United Kingdom under European Union regulations, should be considered after Brexit.
'E-cigs in teens are a gateway to subsequent smoking lit cigarettes and e-cig vapour contains a large number of toxins which in time will obviously harm users, and bystanders'.
Martin Dockrell, of Public Health England, added: "There is good evidence that positive messages on pack inserts can help people quit". "We will carefully consider the recommendations and evidence surrounding the use of inserts into cigarette packages".
"We will carefully consider the evidence and recommendations made in this report and will respond in due course".