It has also been welcomed for giving smaller countries a "second bite of the cherry" in their bid to qualify for the World Cup and European Championships.
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 from 2018 by UEFA's Congress in Kazakhstan on Thursday after receiving backing from the body's ruling executive committee.
The exact format has still to be confirmed but UEFA sources said the 54 European countries would be split into four divisions, with England set to be in a top division of 12 to 14 teams along with Spain, Germany, Italy and Holland.
Each country would play two or three other countries in their division with the winner of each mini-league going to a climax of semi-finals and final at a neutral venue.
In the lower divisions there would be a final to decide on promotion and qualification places for European Championships.
The new tournament would not replace the current qualifying competitions for the Euros, but it would award the four qualification spots that are currently decided by the play-offs. World Cup qualifying spots would be available in the top two divisions.
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.
UEFA have 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.
Football Association chairman Greg Dyke already backed the idea of the Nations League earlier this month, while Scottish FA chief executive Stewart Regan said he had now been convinced after some initial reservations that it would mean Scotland playing too many matches against lower-ranked opponents.
Since it was first suggested, UEFA has refined the plan to include a system of financial payments that will help the countries in the lower divisions.
Scotland are likely to be in the third division, League C, and Regan told Press Association Sport: "When the idea was first proposed we were not particularly enthusiastic but since then the idea has been developed and it will give smaller nations a second bite of the cherry for qualification.
"We will support it but the challenge will be to market it in a way fans can understand it."
Regan said there may also be a chance for countries such as Scotland to host UEFA-backed friendly tournaments on the dates not included as part of the Nations League matches.
Jonathan Ford, chief executive of the Football Association of Wales, said the new competition would alleviate the problems of finding good opponents for friendlies.
He told Press Association Sport: "Any manager would tell you there is no such a thing as a friendly match. Well when this comes in there won't be any more."