The new tournament, which would be played biennially in odd-numbered years on the dates currently reserved for friendlies, is expected to be given the go-ahead by UEFA's Congress in Kazakhstan on Thursday after receiving backing from the body's ruling executive committee on Wednesday.
The exact format has still to be confirmed, but UEFA sources said European countries would be split into four divisions, with England set to be in a top division of 14 teams along with Spain, Germany, Italy and Holland.
The Nations League would begin after the 2018 World Cup and have a climax of semi-finals and final at a neutral venue, while in the lower divisions there would be a final to decide on promotion and qualification places for the World Cup and European Championships.
The new tournament would not replace the current qualifying competitions for those major events, but it would award the four qualification spots that are currently decided by the play-offs.
There would also be some friendly dates kept to allow smaller countries to arrange high-profile fixtures with the big names in European football, and for countries to play friendlies against others from outside of Europe.
The Football Association has already backed the idea of the Nations League.
FA chairman Greg Dyke said earlier this month: "In principle, we'd be quite interested. The hard thing about that is the detail but I think a Nations League where we played the top nations would be very attractive."
UEFA has been working on the new competition for some time - Norwegian newspaper Dagbladet revealed back in October that European football's chiefs were engaged in discussions to change the format of friendly games.