The new competition would exist alongside the Champions League and Europa League and would bring the number of clubs in European football to 96.
It was an idea first put forward in 2015 and should offer more chances for Scottish clubs to progress in European football.
European Club Association (ECA) chairman Andrea Agnelli, who is also on Uefa's executive committee, said the "the green light has been given".
This means the Europa League's group stage would be reduced from 48 teams to 32, with the new competition and the Champions League all having the same number.More news: Tampa Bay Lightning GM Steve Yzerman stepping down
Other discussions at the meeting in Croatia included when clubs must release players for national team duty, playing continental championships for national teams at the same time, and cutting back on domestic matches.
Agnelli also said clubs want a "detailed assessment of the existing global match calendar" after 2024, as the "current model needs modernising".
Change is being driven in part because of clubs from an elite group of wealthy leagues dominating UEFA club competitions.
ECA vice chairman Dariusz Mioduski said a third competition could help close a growing "financial gap and participation gap". This would increase the number of clubs competing in Europe from 80 to 96. It would mark a return to three European club competitions after the Cup Winners' Cup was abolished at the end of the 1998-99 season.
Uefa president Aleksander Ceferin had played down media reports on the subject when speaking to journalists in Monaco last month.