Plans for a new international team tennis tournament have been approved by ATP officials despite fears it could compromise a revamped version of the Davis Cup.

The governing body of men's tennis announced it had been given clearance to move forward with the ATP World Team Cup in a statement Saturday.

The new competition will take place in Australia from January 2020 after the ATP struck a partnership with Tennis Australia and will feature 24 teams battling it out for for $15 million in prize money and ranking points.

ATP executive chairman and president Chris Kermode said: "We're delighted to have reached this outcome, which will change the landscape of the ATP World Tour."

"This event will enable us to kick off our season with a major team event, with minimal impact on existing player schedules at the start of the year. We believe this outcome will deliver long-term sustainability, not only financially but also from a player health perspective, which is critical."

"The event has huge potential, and we now look forward to working together with Tennis Australia in bringing our vision to fruition."

The International Tennis Federation -- which is in charge of the Davis Cup -- had previously set out plans for a similar 18-nation event styled the World Cup of Tennis.

It would take place at the end of the season in November -- mere weeks ahead of the ATP's proposed tournament -- and would replace the current Davis Cup structure.

Barcelona and Spain footballer Gerard Pique was among the backers for the reformed competition, which was aiming to bring back top players who had chosen to skip Davis Cup matches through February, July and September to cope with their crowded calendar.

The fear of having two major team competitions weeks apart had resulted in discussions between the ATP and ITF with the ATP executive chairman Kermode describing the possibility of holding both as "insane".

A final decision on the proposals to transform the Davis Cup will be made at the ITF's Annual General Meeting in August.