The National Rugby Championship will consist of eight to 10 teams including one each from Canberra, Perth and Melbourne, a minimum of two from Brisbane and at least three Sydney-based teams.
The new competition will run from late August to early November at the completion of the Brisbane and Sydney club seasons.
It will be sponsored by Fox Sports with one game per round plus the semi-finals and grand final to be telecast.
Expressions of interest are now being sought from existing Premier Rugby teams wanting to compete in their own right or clubs wanting to form a syndicate.
Expressions of interest close on 13 January 2014, with successful teams expected to be announced by the end of February 2014.
All Super Rugby contracted players and Wallabies not selected in the Test squad will be required to participate in the NRC alongside the next breed of stars.
"This is a major vote of confidence in Australian rugby," ARU boss Bill Pulver said.
"This new competition will be a tremendous opportunity for rugby fans to support teams from across the country in a local competition that we hope will rival New Zealand's ITM Cup and South Africa's Currie Cup at a time of year when there is little local rugby being played.
"I'd like to acknowledge the support shown by stakeholders and club competitions across the country, particularly in Sydney and Queensland, where Premier Rugby competitions are working to schedule their seasons to avoid any scheduling clashes with the National Rugby Championship.
"We will continue to work with stakeholders at all levels of rugby, including at club level, to further improve the vital role they play to create elite players."
The ARU has set up the National Rugby Championship Commission to establish the competition.
The Commission includes representatives from Australian Rugby Union, the Rugby Union Players' Association (RUPA), Super Rugby, Fox Sports and Foxtel.
"It is chaired by independent sports consultant, John Boultbee AM, who has worked extensively in Australian and international sport including rowing, soccer and at the Australian Institute of Sport."