A new city-based eight-team Twenty20 tournament has been given the go-ahead to start in 2020.
The proposals were approved by 38 of the 41 England and Wales Cricket Board members, with 15 first-class counties in support of the competition.
Essex and Middlesex were the only two counties to vote against the proposals, while Kent abstained from voting.
"I passionately believe that the game has chosen the right path," ECB chairman Colin Graves said.
The ECB needed 31 members to vote in favour of the tournament which will be played alongside the existing T20 Blast.
It is not yet known which cities will have sides and where the matches will be played.
"Each of our members will benefit and, critically, so will the whole game," Graves added. "We can now move on with building an exciting new competition for a new audience to complement our existing competitions.
"Our clear ambition is that this new competition will sit alongside the IPL and Big Bash League as one of the world's major cricket tournaments."
How will it work?
- Eight new teams playing 36 games over a 38-day summer window, with four home games per team
- All games televised, with significant free-to-air exposure
- No scheduling overlap with the existing T20 Blast competition
- An Indian Premier League-style play-off system to give more incentive for finishing higher up the league
- A players' draft, with squads of 15 including three overseas players
- Counties guaranteed at least £1.3m each per year
'A sustainable future for first-class counties'
The ECB has said the competition will give cricket the chance to be part of "mainstream conversation" and believes the tournament can make the sport "relevant to a whole new audience".
But Graves said they would make sure it benefited all counties and it marked "an exciting new era" for cricket in England and Wales.
"The ECB executive and T20 development team will now continue to work with the game as we build the new competition, ensure it is positioned distinctively from our existing competitions and realise its full potential," he added.
"All decisions - including the creation and base of each team - will be made within the game, guided by our shared strategy and built on best practice, research and insight.
"The benefits it will bring can deliver a sustainable future for all 18 first-class counties and an exciting future for the game in England and Wales."