Clubs playing in European competitions will have to start including home-grown players in their squads from the 2006-07 season following a unanimous vote by the UEFA congress on Thursday.
The new rules will apply only to clubs playing in Champions League and UEFA Cup matches but UEFA hopes the policy will be introduced at domestic level in the near future.
From the start of the 2006-07 season clubs must include four home-grown players in their 25-man squads with that figure rising to six in 2007-08 and eight in 2008-09.
The definition of a home-grown player is one who has been trained by their clubs or by another club or national academy in the same country for at least three years between the ages of 15 and 21.
UEFA vice-president Per Ravn Omdal,said: “This is of fundamental importance to the future of football.
“You may think that four out of 25 is a low number and it is but we want a limited and moderate step here so that the clubs can keep in line with our new rule by 2008-09.”
UEFA also agreed to a declaration on the issue.
“UEFA recognises that finance plays an important part in football today but football should not be a mere financial contest,” the declaration said.
“It should above all be a sporting contest. This sporting element means that every club must accept some responsibility for training and not rely solely on acquiring those players who were trained by others.”