The BRICS group of emerging powers has created a Shanghai-based development bank and a reserve fund as alternatives to the World Bank and the IMF.
The leaders of Brazil, Russia, India, China and South Africa agreed to launch the institutions to finance infrastructure projects and head off future economic crises.
"We took the historic decision to create the BRICS bank and the reserve agreement - an important contribution to reconfigure the system of international economic governance," Brazilian President Dilma Rousseff said on Tuesday at a summit in the northeastern seaside city of Fortaleza.
Russian President Vladimir Putin hailed the agreements as "a very powerful way to prevent new economic difficulties".
The five emerging countries first unveiled their plans last year.
The New Development Bank aims to rival the US-based World Bank while the reserve is seen as a "mini-IMF".
"We need to work to improve economic governance at a global Level, increase the representations and voice of developing countries," said Chinese President Xi Jinping.
Rousseff renewed calls for reform at the International Monetary Fund saying it "urgently needs to review its distribution of voting power in order to reflect the unquestionable weight of emerging countries".
The development bank will have initial capital of $US50 billion ($A54.10 billion) that could rise to $US100 billion, funded equally by each country.
BRICS leaders agreed to put the bank's headquarters in Shanghai.
The first president will be Indian while the first board chair will hail from Brazil.
An Africa Regional Centre will be based in South Africa, whose President Jacob Zuma failed to convince his peers to place the bank's headquarters in Johannesburg.
The bank will help emerging and developing countries mobilise resources for infrastructure and sustainable development projects, the summit declaration said.
The Contingent Reserve Arrangement will have $100 billion at its disposal to head off potential economic volatility linked to the United States exiting its stimulus policy.
China is expected to make the biggest contribution, $US41 billion, followed by $US18 billion each from Brazil, India and Russia and $US5 billion from South Africa.
The summit comes as the economies of some BRICS countries, which together represent 40 per cent of the world population and a fifth of the global economy, are cooling down, with Russia and Brazil expecting just one per cent growth this year.
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