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The Premier Cricket league will feature two teams from India, competing against domestic Twenty20 finalists from England, Australia and South Africa.
And there will be a £2.5m prize fund, with £1m going to the winners.
The new competition is the board's answer to the breakaway Indian Cricket league, which is due to take place in October and November.
English county side Leicestershire hosted a similar, but smaller scale competition two years ago, which was won by Pakistan's Faisalabad Wolves.
The prize money on offer in India, however, is on a par with that provided by billionaire Allen Stanford for his own Stanford Twenty20 competitiopn in the Caribbean.
Past and present India captains Rahul Dravid, Sourav Ganguly and Sachin Tendulkar were present at the launch in Delhi, along with former Australia fast bowler Glenn McGrath and ex-New Zealand skipper Stephen Fleming.
Spin bowler Shane Warne is also supporting the new venture, having turned down a big-money contract offered by the ICL.
The Premier League plan has been welcomed by the England and Wales Cricket Board and their counteraparts in Australia.
"For county, state and province players, the introduction of the T20 champions competition provides a new and exciting pinnacle," said ECB chief executive David Collier.
"It will provide teams with the opportunity to earn the title of the world club champions in a format which will be eagerly anticipated by spectators and players alike."
Cricket Australia chief James Sutherland said the competition supported their view that Twenty20 cricket's development "should be managed in a way which engages and harnesses public excitement for the format, while complementing Test and one-day international cricket".
He added: "The champions Twenty20 format will enhance rather than compromise existing domestic and international competitions round the world."
India hopes that the competition will be expanded in the future to include teams from the other Test-playing countries.
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