The proposal was raised in July 2021, and this decision will mean a de facto halt to sales of petrol and diesel vehicles and a complete shift to electric engines in the European Union from 2035.
The measure is intended to help achieve the continent's climate objectives, in particular carbon neutrality by 2050.
At the request of countries including Germany and Italy, the EU-27 also agreed to consider a future green light for the use of alternative technologies such as synthetic fuels or plug-in hybrids if they can achieve the complete elimination of greenhouse gas emissions.
Environment ministers meeting in Luxembourg also approved a five-year extension of the exemption from CO2 obligations granted to so-called "niche" manufacturers, or those producing fewer than 10,000 vehicles per year, until the end of 2035.
The clause, sometimes referred to as the "Ferrari amendment", will benefit luxury brands in particular.
These measures must now be negotiated with members of the European Parliament.
"This is a big challenge for our automotive industry," acknowledged French Minister of Ecological Transition Agnes Pannier-Runacher, who chaired Tuesday's meeting.
But she said it was a "necessity" in the face of competition from China and the United States, which have bet heavily on electric vehicles seen as the future of the industry.
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