Young unemployed people will be guaranteed the offer of a new job, training or education under a new commitment agreed by EU ministers.
European Commission president Jose Manuel Barroso said the scheme, which will apply to people out of work for more than four months, gives them a real chance of a better future.
"Too many young Europeans are asking if they will ever find a job or have the same quality of life as their parents," he said. "They need answers from us. That is why, for the past two years, the European Commission pushed the urgent need to tackle youth unemployment to the top of Europe's political agenda."
Mr Barroso has urged all EU member states to enforce the new initiative as swiftly as possible.
The commitment will see a new job, continued education, apprenticeship or traineeship offered to under-25s unemployed for four months on leaving school or being made redundant. EU ministers agreed to adopt the scheme during talks in Brussels on Thursday.
European commissioner for employment, social affairs and inclusions Laszlo Andor said EU funds would help member states put the Youth Guarantee into place. But he warned they would also have to invest their own money to avoid higher costs in the future.
States have been advised to develop strong partnerships with schools and universities, training providers, employment services, social partners, career guidance providers, youth support services and youth organisations to ensure early intervention and action.
A six billion euro pot in the EU budget has already been set aside to tackle youth employment in regions with jobless rates of around 25%.
Earlier, Mr Barroso, in Dublin for talks with Taoiseach Enda Kenny, said it was a sad fact that there are both high levels of unemployment and skill shortages across Europe.
Mr Barroso warned a conference of chief executives that a shortfall in ICT professionals could reach 700,000 by 2015 if young people are not trained to fill positions.