The Magners League will be expanded to 12 teams next season to include two Italian "super sides", Celtic Rugby announced on Monday.
The Welsh, Irish and Scottish unions agreed unanimously that Benetton Treviso and Aironi Rugby should join the competition as part of a four-year agreement.
The decision ends a year-long study into the viability of expanding the competition.
David Jordan, director of Celtic Rugby, said: "This is another massive step forward for the Magners League.
"As well as providing more fixtures for the teams already involved this will also bring both a major cash injection into the competition and greater exposure across Europe.
"Operationally it will present new challenges, as well as opportunities, but by introducing Italy into the Celtic fold it will also dramatically broaden the appeal of our product.
"It is anticipated that the Italian super clubs will be largely made up of Italian internationals of full, A and under-20 levels, with a sprinkling of top class overseas players set to provide further extra strength and spice to the tournament."
The inclusion of Italian sides continues the Magners League revamp, which began this season with a new play-off and Grand Final system to decide the champions.
The Magners League began life as the Welsh-Scottish League in 1999 before growing into the Celtic League with the inclusion of Ireland in 2001.
The first moves to expand the tournament into new territories were made in 2005, with the proposal of a 24-team Rainbow Cup featuring teams from Wales, Scotland, Ireland, Italy and South Africa.
The Celtic unions are convinced the agreement will not only benefit the Magners League but the Heineken Cup and Six Nations.
Irish Rugby Football Union chief executive Philip Browne said: "The inclusion of the two Italian sides for next season can only strengthen the competition into the future."
The Magners League has continually grown year on year in terms of attendances, viewership and standards.
"Ultimately what is good for the Magners League will be good for European rugby and also for the international game by bringing Italian rugby into the competition."
© Press Association