It is a major reform of a sport that is struggling to provide meaningful opportunities to smaller unions and comes at a time when the likes of Portugal and Fiji have shown the promise of Tier Two sides at the World Cup in France.
The 2027 World Cup in Australia will expand from the current 20 to 24 teams, split into six first-round groups each containing four sides.
There will be a round of 16 added and, despite more competing sides, will be shortened from seven weeks to six.
"This incredible Rugby World Cup 2023 tournament has demonstrated the passion and potential that lies beyond the top 10 or 12 nations," World Rugby chairman Bill Beaumont said in a media release on Tuesday.
"It is not acceptable to accept the status quo. Not acceptable to do nothing."
The Nations League format has yet to be revealed but will see a 12-team top division comprising sides from the Six Nations and Rugby Championship, and reportedly Japan and Fiji, meeting every two years in the July and November international windows.
There will be a second division with a further 12 teams, which will be run by World Rugby.
There will be promotion and relegation between the two, but only from 2030.
There will also be a new, annual expanded Pacific Nations Cup competition in 2024 featuring Canada, Fiji, Japan, Samoa, Tonga and the USA.
World Rugby said the changes had been made to allow those nations greater access to play elite opposition, but there has been criticism that the initial ‘closed shop’ nature of the Nations League will hinder this.
This was the issue raised by every Tier Two coach after their teams went out of the 2023 World Cup, all of them saying they would be competitive at tournaments only if they got more opportunities to play the top teams.
World Rugby said that in the years when the Nations League was not played, there would be "a significant uplift in the number of cross-over matches between unions in the respective divisions".
“We now look forward to an exciting new era for our sport commencing in 2026," Beaumont said.
"An era that will bring certainty and opportunity for all. An era that will support the many, not the few, and an era that will supercharge the development of the sport beyond its traditional and often self-imposed boundaries."
There will also be a first dedicated international release window in the women’s game from 2026, with a review of the global calendar and competition structures promised in the future.
World Rugby also said there would be a "commitment to more effectively manage player load and welfare in the fast-evolving women’s game."