An agreement for a new tournament to replace the existing European Cup structure has been signed by the various rugby union governing bodies in Europe.
The nine stakeholders have agreed to introduce the European Rugby Champions Cup in place of the Heineken Cup from the 2014/15 season.
The European Rugby Champions Cup will be one of three cross-border competitions and it will be joined by the European Rugby Challenge Cup and a new competition called the Qualifying Competition under an eight-year deal.
A new association will also be established in Switzerland called European Professional Club Rugby (EPCR) and this body will be responsible for organising and managing the cup competitions, replacing European Rugby Cup (ERC).
Sky and BT have also reached an agreement in principle concerning arrangements for the European Rugby Champions Cup and the European Rugby Challenge Cup competitions, both of which would be broadcast jointly by Sky Sports and BT Sport.
The pool matches would be shared equally, while both would show two quarter-finals each, one semi-final each and the final would be broadcast by both live under a four-year agreement which is subject to contract.
Barney Francis, managing director of Sky Sports, said: "This is a good day for rugby. The agreement offers clarity for European rugby and enables the clubs to plan for the future.
"With these new competitions, we're delighted our viewers can look forward to even more top-class European coverage across our platforms."
Simon Green, director of BT Sport said: "It is fantastic news for rugby fans that we have reached a deal with Sky Sports.
"The game of rugby had to come first and both companies have recognised that by showing a high degree of maturity and flexibility."
The European Rugby Champions Cup will feature 20 clubs who will qualify through the finishing positions in their leagues from the preceding season.
The 20 clubs will be the top six from the TOP 14 in France, the top six from Premiership Rugby in England, the top seven from the PRO12, with at least one club from each country participating in the league - Wales, Ireland, Scotland and Italy - to be included, and the winner of a play-off.
Five pools of four teams will play each other home and away, with the section winners and three best runners-up progressing to the quarter-finals.
The second-tier Amlin Challenge Cup will be replaced by the 20-team European Rugby Challenge Cup featuring 18 clubs from the top three leagues and a further two from outside.
The Qualifying Competition will involve between eight and 12 teams, two from Italy and others from second-tier nations.
Mark McCafferty, Premiership Rugby's chief executive, has welcomed the deal.
"These new club competitions will create top quality sporting drama for our supporters and commercial partners across Europe," he said.
"They deliver a stronger playing format for everyone. We are now entering a new phase of growth in the club game and alongside the three professional leagues, we're confident that the new competitions will go from strength to strength, as well as incorporate new markets over time."
Welsh Rugby Union chief executive Roger Lewis, said: "I am delighted that from today we can all move forward with a clear and agreed structure in place for European competition from next season.
"Everyone involved in the game, from players through to supporters and sponsors, can start to plan in earnest for the future.
"There have been many difficult issues to overcome to reach this stage, but the WRU has remained confident that a resolution would be found and today's unanimous confirmation is clearly good for our game."