Although the exact format has yet to be finalised, four slots for the 2020 European Championship will be made available to teams from the new competition who have not progressed through the usual qualifying route.
"Twenty teams will advance from the qualifying competition to the Euro 2020 finals - which are being played in 13 cities around Europe," UEFA general secretary Gianni Infantino told delegates from all 54 member nations at the Congress in Kazakhstan, where the new event was unanimously approved.
"That leaves four extra slots to be filled and they will come from four teams from the Nations League who have not otherwise qualified through the qualifiers."
The Nations League will largely replace friendly internationals, which have become increasingly unpopular for many middle and lower-ranked teams around the continent as well as with clubs forced to release their players.
One feature of the new competition will be a promotion and relegation element with a four-team finals being held in odd years in one selected country.
Wolfgang Niersbach of Germany, chairman of the National Teams Competition Committee, said: "This is a big step for national teams in Europe and we hope that fans will support the new format."
UEFA has spent three years studying proposals for the new competition and, while some fine-tuning remains, the concept has been more or less agreed.
The continent's 54 teams will be divided into four large groups based on UEFA's coefficient rankings with countries competing to become either Nations League champions, earn promotion to a higher tier or avoid relegation to the level below.
Ahead of the Euro 2020 tournament, each of the larger groups will be divided into four pools of three or four teams with each country playing four or six fixtures between September and November 2018.
A final four competition involving the pool winners of Group A, the top-ranked section, will start in 2019, whereas playoffs for the Euro 2020 finals will take place the following March.
English FA general secretary Alex Horne, who is also a National Teams Competition Committee member, welcomed the new competition and told Reuters: "Its a very interesting concept.
"Following the expansion of the Euros from 16 to 24 teams, the qualifying competition is not quite as intense as it might have been and this new competition should add some spice to the fixture list."
The European Club Association (ECA) also welcomed the Nations League, although it said it would need to see further details before assessing the impact on club football.
"A positive aspect of this new concept is that our players will no longer have to travel around the world for friendly matches," ECA chairman Karl-Heinz Rummenigge said.
"I am not worried about the Champions League; it is a prime product and the Europa League as well will continue to flourish."
The world players' union FIFPro said it was concerned about the strain on top players.
"It should be clear that there is a difference between a friendly match and a competitive match", said FIFPro director Tijs Tummers in a statement.
"As we understand, the Nations League will be another prestigious competition. As a consequence, that implies an increase in the workload for the group of top players."
FIFPro said that coaches often use friendly matches to give young players a first taste of international football and rest their top players.
"That will change when there is more at stake," said Tummers.
The Association of European Professional Football Leagues (EPFL) said it would await further details to assess "the possible sporting and commercial impact of this competition on the football landscape both at domestic and international level".
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