The inaugural competition will consist of the Queensland Reds, the NSW Waratahs, the ACT Brumbies and Perth's Western Force playing in a home and away series with a mid-year final.
The final concept was one of several proposals which included a Super 8 contest involving the four Super 14 clubs, Japan's national team and the three Pacific Islands - Samoa, Fiji and Tonga.
But that was scuppered by New Zealand, which was worried the IRB-backed competition would help to boost Australian playing stocks at the All Blacks' expense.
ARU chairman Dilip Kumar said after Friday's meeting that he believed there was now widespread support for the provincial competition with the potential for expansion.
"From the ARU's perspective, we have taken a vital step for the game in Australia. We are engaged in very positive discussions with our Member Unions and the strong sense that we have a golden opportunity here is appreciated by everyone," Kumar said in a statement.
ARU managing director Gary Flowers said a feasibility study would be conducted into the possibility of expanding the APC into a broader competition in the future.
"We will consult with all our stakeholders in carrying out a thorough feasibility assessment and risk analysis," Flowers said.
"There is the further potential for two Japanese teams to join the competition in the future and perhaps play some non-competition games next year.
"Most importantly, there will now be more high quality rugby for our professional players not involved in the Wallaby squad following the completion of the Super 14 season.
"This will also be a direct pathway for club players through to the national team."
Flowers said the competition would be carefully managed to minimise the effects on club rugby.
"We believe these extra high quality matches will provide a boost for clubs because of the number of players who will benefit from performance at the higher level," he added.
"A significant amount of work has gone into developing the APC concept from a commercial, high performance and logistical perspective. Now the Board has signed off, we can begin more detailed work in conjunction with the Super 14 Unions."