Australia's lack of depth and development has been exposed in recent years with nothing to bridge the gap between metropolitan club rugby and professional Super Rugby.
"The competition will be an exciting spectacle for fans and will enhance the pathway to develop elite players, coaches and match officials," Australian Rugby Union chief executive Bill Pulver said.
"This new competition will be a tremendous opportunity for rugby fans to support teams from across the country in a local competition that we hope will rival New Zealand ... and South Africa ... at a time of year when there is little local rugby being played."
New Zealand provincial teams have contracted several Australian Super rugby players in the past few seasons while up-and-coming players, like Wallabies winger Peter Betham, have used the championship as their springboard into Super Rugby.
The Australian competition, called the National Rugby Championship, had been funded by pay television provider Foxtel, Pulver said, which would give the broadcaster added local content at the end of the Super Rugby season.
Between eight and 10 teams from major metropolitan centres are expected to be included in the inaugural competition, but will need to meet certain financial, player development, fan potential and playing facility criteria.
Pulver said the teams could be drawn from existing clubs or joint ventures between several sides.
The teams will be confirmed by February next year, with the competition to run from August to October.
- Sports & Recreation
- Super Rugby
- New Zealand