The competition, which is set to replace the large majority of the international friendly calendar for European nations, will be organized into a league format, featuring promotion and relegation.
Although the precise format of the competition has yet to be decided, UEFA's provisional plan is to divide all 54 member association teams into four groups based on coefficient ranking, with promotion to a higher group - or even for a qualifying place at the European Championship - the prize for performing well.
Wolfgang Niersbach, chairman of the National Teams Competition Committee, is confident the move is the right way forward to spark interest in European international football outside of the major tournaments.
"We accept and respect that all UEFA member associations have agreed to create a new competition," he said at the Ordinary UEFA Congress in Astana. "This is a big step for national teams in Europe and we hope that fans will support the new format."
The transition into the new Nations League will begin as qualifying for Euro 2020 gets underway in the autumn of 2018.
UEFA states that the four large coefficient groups will be further split into three or four smaller pools, with each team playing four to six matches between September and November of that year.
A further competition featuring the pool winners will then take place early the following year, well before the playoff round for the Euro 2020 finals, which are planned for March 2020.
UEFA secretary general Gianni Infantino stated prior to the congress: "What has triggered this whole discussion is that we have been working to establish a new international calendar. We also wanted to bring more structure to the dates when there are friendly matches.
"There are some countries everyone wants to play against and other teams who struggle to find opponents, so we looked for something new and have come up with the Nations League."
The move is the latest significant reform adopted by UEFA president Michel Platini, following his decision to stage the Euro 2020 finals across the continent in a "romantic" celebration of the tournament's 60th anniversary.