UEFA have approved plans to limit clubs in Europe to spending within their means in the years to come.
President Michel Platini announced the new plan following a meeting of UEFA's executive committee in Switzerland.
The former France legend said: "We have worked on the financial fair play concept hand-in-hand with the clubs, as our intention is not to punish them, but to protect them.
"We have an agreement with the clubs. The philosophy is that you cannot spend more money than you generate.
"This approval is the start of an important journey for European football's club finances as we begin to put stability and economic common sense back into football. I thank all the stakeholders who have supported this along the way."
In response, a joint statement from the FA and the Premier League read: "The FA and the Premier League are fully supportive of the principle of sustainability and of football clubs living within their means.
"The vast majority of what has been agreed by UEFA is in line with current domestic regulations and English football will respect any rules put in place for clubs competing in Europe.
"We recognise the difficult task undertaken by UEFA in this process and we have asked that certain issues be monitored so as to ensure these rules do not create unintended consequences - such as preventing smaller clubs from having the opportunity to invest the resources required to compete at a higher level."