Under the proposals, countries could fit the plastic card with a microchip containing information about the driver – a move, the European Commission (EC) says, which will help beat fraud.
Transport commissioner Loyola de Palacio said the idea was also to remove one of the last obstacles to the free movement of European Union (EU) citizens.
She said: 'More than 80 different driving licence models with different entitlements and validity periods are currently circulating in the member states.
'Hardly any proper enforcement of driving licences is possible. It is time to equip European drivers with anti-fraud driving licences, guaranteeing their right to drive vehicles for which they have the required qualifications.'
About 200 million EU citizens currently hold driving licences, with many of them using cars for cross-border trips between EU countries.
The EC's proposals would also prevent one country from issuing driving licences to motorists when they have had their licences withdrawn from the normal country of residence because of traffic offences.
New licences would have to be renewed every 10 years for car drivers and it will be left to the individual country's discretion whether drivers will have to take a refresher course before a new licence is issued.
If approved by the EU, the new driving licence could either be introduced by member states with immediate effect or brought in when existing national licences gradually expire.