The licence will mean that drivers can move freely around Europe and should help reduce fraud.
Under the plans, a single credit-card style of licence will replace the 110 different licences currently spread across the continent.
After the directive from Europe comes into force, member states will have 26 years to replace their existing licensing system.
The new rules foresee a 10-year validity to licences, which member states could raise to 15 years if they want. At the end of that time licences will be reviewed, and drivers could be asked to take a medical examination.
The directive will be considered by the European Parliament later this year.
Jacques Barrot, vice-president of the European Commission, said: ‘The European driving licence is of vital importance for road safety and for the fight against fraud.
‘It will make travel around Europe easier and without bureaucratic difficulties. All drivers will have clear, modern licences that will be accepted in all member states. I am pleased the council succeeded in reaching this agreement.’