The permanent structured cooperation on defence -- or PESCO -- aims to deepen defence cooperation between European Union members and improve coordination in the development of new military technology.
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The agreement is part of efforts led by Germany and France to push closer defence ties as a way of rebooting the bloc after Britain's shock vote to leave and follows the announcement in June of a European Defence Fund that will receive 5.5 billion euros annually.
The notice of intent to be inked in Brussels on Monday, seen by AFP, includes a pledge to "regularly increasing defence budgets in real terms" as well as commitments to devote 20 percent of defence spending on procurement and two percent on research and technology.
"We've never come close to this before," an EU official said. "We have more than 20 member states signing up to structured cooperation. Not just signing paper -- undertaking commitments in terms of spending on defence and joint projects."
Since the failure of the European Defence Community more than 60 years ago there have been numerous attempts to achieve closer military union, but they have foundered as member states have proven reluctant to hand over responsibility for military matters.
PESCO includes a pledge that countries will provide "substantial support... with personnel, materiel, training, exercise support, infrastructure" for EU military missions, the document said.
Countries not signing up on Monday will be able to join PESCO later, and the deal also includes provisions for non-EU members, which would include Britain, to take part in specific projects.
The PESCO drive however has revealed strains between Paris and Berlin, with the French pushing for a smaller group of nations committed to ambitious projects and Germany wanting a more inclusive arrangement with as many of the bloc's 27 members -- minus Britain -- as possible.
Britain -- a nuclear power with permanent veto power at the UN Security Council -- has long been fiercely opposed to anything that might lead to the creation of an "EU army" commanded by Brussels.
Its impending departure from the bloc has given fresh impetus to closer EU defence cooperation and in March ministers approved plans to create an embryonic military headquarters to coordinate EU overseas operations.
Once signed by defence ministers, the agreement will be officially launched on the eve of the next EU summit in December.
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