The scheme will make it easier for would-be volunteers to gain first-hand experience of a foreign country. They will be allowed to stay for up to a year and will be given a subsistence allowance for their bed and board.
A spokeswoman for the Department for Education and Employment said: "We are hoping to sign up as many young people as possible. We will be building on our pilot scheme which has already seen 500 people move abroad with very promising results. It gives young people opportunities that they would otherwise not have as they will be able to choose from a huge range of work, albeit unpaid. "
Education and employment minister Kim Howells said: "Such initiatives develop a sense of citizenship in young people and help to eliminate exclusion and discrimination."
The agreement was reached by members of the EU conciliation committee, chaired by Mr Howells, and has been approved by MEPs. A budget of 47.5 million ecus (Pounds 32m) has been earmarked for the programme. The voluntary force will run initially for two years, after which it will be reviewed.