The competition will replace most international friendlies and feed into qualifying playoffs for the 2020 European Championship. It could later be incorporated into qualifying for the 2022 World Cup.
UEFA President Michel Platini says it is "a very important decision for the future of football at the level of national teams."
The tournament format is yet to be finalised, although it foresees 54 teams ranked in four divisions playing September-November 2018.
Twelve top-ranked teams would play in four three-team groups in Division A. Those group winners advance to a finals tournament.
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Qualifying groups for Euro 2020 would be played March-November 2019.
Euro 2020 playoff teams would be decided by Nations League results.
