The West African form of the CFA franc will be renamed and some of its financial links to France cut in a move likely to please critics who have long seen the region's common currency as a colonial relic.
The changes were announced on Saturday (December 21) during a visit by French President Emmanuel Macron to the Ivory Coast.
Ivorian president Alassane Outtara called it a historic day for his country and the whole of West Africa.
Under the deal the currency will be renamed the Eco.
While it will remain pegged to the euro, the currency bloc will not have to keep 50% of their reserves in the French Treasury and there will no longer be a French representative on the union's board.
The CFA Franc was born in 1945 and at the time stood for Colonies Francaises d'Afrique, or French Colonies in Africa.
This was later changed to Communaute Financiere Africaine in West Africa, meaning African Financial Community.
Its relative value to the French franc remained largely unchanged until 1994 - when it was devalued by 50% to boost exports from the region - a move that caused painful price increases, demonstrations and violent clashes.
Macron said the deal was an end of certain relics of the past - adding that he does not want to influence through guardianship or intrusion.
The CFA is used in 14 African countries with a combined population of about 150 million and $235 billion of gross domestic product.
The changes announced on Saturday will only apply to West African form of the currency used in Benin, Burkina Faso, Guinea Bissau, Ivory Coast, Mali, Niger, Senegal and Togo - all former French colonies except Guinea Bissau.