The drink was found to widen the artery which runs from the shoulder to the elbow by 4 per cent within 30 minutes - reducing the risk of blood clots.
This is a good indicator of improved blood flow around the body, says a report in the European Journal of Cardiovascular Prevention and Rehabilitation. It is the first time green tea has been shown to have a short-term beneficial effect on the large arteries.
Dr Nikolaos Alexopoulos and colleagues at the 1st Cardiology Department, Athens Medical School, used ultrasound scanning to measure the performance of the brachial artery - which runs from the shoulder to the elbow, and is a good indicator of blood flow around the body.
A team of healthy volunteers were given green tea, caffeine or hot water to drink on three separate occasions. Measurements of the brachial artery were taken at three stages after they drank their beverage.
The researchers found the artery expanded by four per cent 30 minutes after volunteers drank green tea. Caffeine or hot water had no effect.
Dilation of the artery shows better functioning of the endothelium, the layer of cells lining blood arteries that stops clots forming.
Previous research suggests black tea improves short and long-term endothelial performance, but this is the first time green tea has been shown to have a short-term beneficial effect on the large arteries.
Another study has already shown that green tea reverses endothelial dysfunction in smokers.
Green tea is traditionally consumed in China and Japan and differs from black tea in that it is not fermented before drying.
This fermentation process appears to reduce the content of flavonoids - beneficial antioxidants - by up to 90 per cent, which is why green tea is believed to offer different health benefits to black tea.
Researcher Dr Charalambos Vlachopoulos said 'These findings have important clinical implications. Tea consumption has been associated with reduced cardiovascular morbidity and mortality in several studies.
'Green tea is consumed less in the Western world than black tea, but it could be more beneficial because of the way it seems to improve endothelial function.
'Recent studies have also shown potent anticarcinogenic effects of green tea, attributed to its antioxidant properties.'
Other research shows drinking green tea lowers 'bad' cholesterol and blood pressure, and reduces harmful liver enzymes.
Drinking green tea could help stave off cancer, with a study showing just four cups of green tea a day reverses cell damage in heavy smokers that might lead to the development of tumours.
Lynne Garton a member of the industry-backed Tea Advisory Panel and a nutritionist, said 'This exciting piece of research takes us one step further in understanding the role of flavonoids in heart health.
'While the focus of the study was the action of green tea on endothelial function, black tea, as enjoyed by the majority of the UK population, has shown similar results.
'This is not surprising as although the types of flavonoids in green tea and black tea may differ, it is thought that the amounts present in a cup are similar.
'Evidence is now suggesting that drinking around 3 to 4 cups of tea a day (with or without milk) may help reduce the risk of developing heart disease and studies such as these are important in helping us understand the possible mechanisms of action.
'As part of an overall, healthy balanced diet, this research highlights yet another good reason to drink tea.'