EU ministers have agreed to the creation of European driving licences that are set to come into operation by 2012.
Each licence will be in the form of a credit card with a regularly updated photo and possibly a microchip to prevent fraud.
Subject to final approval, national licences will be phased out between 2012 and 2032. The new ones will have to be replaced every 10 or 15 years.
EU Transport Commissioner Jacques Barrot said: "We needed this new updated system.
"The European driving licence is of vital importance for road safety and for the fight against fraud. It will make travel around Europe easier and without bureaucratic difficulties."
The new scheme will also see licences for mopeds and motorcycles standardised, with licences for mopeds only available after an obligatory theoretical test.
Support within the European Parliament is strong for the new driving licences so the law is expected to be passed this year.