The 20 clubs have agreed the introduction of a home-grown player rule, which will take effect at the start of the 2010/11 campaign.
From next season, clubs must include eight home-grown players out of a squad of 25.
A home-grown player will be defined as one who, irrespective of his nationality or age, has been registered with any club affiliated to the Football Association or the Football Association of Wales for a period, continuous or not, of three entire seasons or 36 months prior to his 21st birthday (or the end of the Season during which he turns 21).
Clubs will be able to supplement their squads with unlimited additional players under the age of 21 on 1st January in the year in which the season commences.
Changes to the squad list of 25 may be made during the period of a transfer window.
Chief executive Richard Scudamore confirmed: "As of next season clubs will be required to have a squad named of up to 25 players, of which no more than 17 can be over the age of 21 and not home grown.
"The definition of home grown is trained for three years under the age of 21 by somebody in the English and Welsh professional system.
"Clubs will have to declare their 25 at the end of August when the window shuts and then again at the end of January."
Premier League Academies have 320 scholars aged between 16 and 18 and a further 2,486 students aged under 16.
Over 85 per cent of Academy scholars (16 - 18 years of age) are British, a proportion that rises to around 95 per cent for students (under 16 age groups).
Academic standards, as judged by Ofsted, are good and the welfare of the young people is of paramount importance to the Premier League and its clubs.
Scudamore believes the England team will ultimately reap the reward of the new ruling which he feels in unlikely to encourage clubs to hoard young overseas players.
"It's not in the club's interests to stockpile players. It will make buying home-grown talent more attractive," he said.
"We're not going down the route of a nationality test but what this will mean is that you just can't buy a team from abroad.
"We think it will give clubs an extra incentive to invest in youth. We think that one of the benefits will be that it will help the England team."
Sports minister Gerry Sutcliffe has welcomed the Premier League's new rules on home-grown players as being good for the long-term health of football.
Sutcliffe said: "I welcome the Premier League's introduction of a home-grown player quota for squads and its implementation of strengthened financial reporting rules.
"These moves will encourage clubs to develop and bring through young talent and help ensure clubs are financially stable."
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