The UEFA Cup will be renamed the Europa League from next season in an effort to boost the popularity of the ailing competition.
The new-look league will also be extended to include 48 clubs in 12 groups of four, with teams playing each other home and away as opposed to just once as it stands now.
The winner and runner-up in each group then join the eight teams that drop out of the Champions League in a 32-club knock-out stage.
Europe's second-tier competition has been called the UEFA Cup since 1971 when it replaced the Inter Cities Fairs Cup and the name change and overhaul is effectively a final throw of the dice by UEFA to boost the fortunes of the Champions League's poor relation.
UEFA president Michel Platini said: "These changes will improve this historic competition which is very important for UEFA and for European football, as it gives more fans, players and clubs the thrill of European club football."
"I am convinced the new format will give the UEFA Europa League a successful new impetus."
The competition has TV rights sold centrally, in the same way as the Champions League, which should increase income to clubs.
• Meanwhile, UEFA are expected to formally confirm in December that Wembley will host the 2011 Champions League final.
The Government have confirmed an exemption to tax rules for players appearing in the final and the decision should be rubber-stamped by UEFA's next executive committee on December 16.
Dublin's Lansdowne Road is viewed as favourite to be named as venue for the 2011 Europa League final.