Addis Ababa - African leaders agreed on Sunday in the Ethiopian capital to transform the African Union (AU) Commission into the African Union Authority (AUA).
This will be done as a compromise step toward eventually forming a continent-wide government.
Briefing journalists, AU Commission Chairman Jean Ping said the new authority would have a broader mandate than the existing commission.
"We are creating an institution with a bigger mandate, with bigger capacities, which moves us toward the goal of the union government," Mr Ping said although details of the change were still under discussion.
He said, however, governments will still retain their sovereignty under the existing system.
"The body will be headed by a president and a vice-president, and the commissioners will become secretaries charged with portfolios," Mr Ping said.
The 53-nation African Union said it would agree by Wednesday on reforms to the organisation.
The idea of creating a future union government for Africa, which is believed would boost Africa's international standing, has been discussed for several years among the region's leaders. It has been supported strongly by Libyan leader, Muammar Gaddafi.
However, many African leaders were reluctant to relinquish any of their sovereignty to a new government, while some favour strengthening regional institutions before creating a continent-wide system.
The establishing of a unified Africa to give Africa stronger bargaining power at international forums has been a dream of several generations of pan-Africanists.
The South African government since 2007 has embarked on an intensive countrywide campaign to gather the views of its citizens on the envisioned African Union Authority.
The representatives all showed support for the position which was eventually adopted, namely that of a gradual process of integration, strengthening of multilateral institutions as well as the strengthening and integration of Regional Economic Communities (RECs).
South Africa falls under the 14 member SADC REC, whose other member states include Angola, Botswana, Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Swaziland, Tanzania, Zambia and Zimbabwe.
Timelines and the method for Africa's integration are to be set out according to the Accra Declaration, adopted at the conclusion of the three-day summit.
The approach will entail strengthening AU organs, including the AU Commission, as well as speeding up the integration of RECs, with the final objective being the creation of a union government.
The Accra Declaration expresses the AU leaders' conviction that the ultimate objective of the AU is the United States of Africa, with a Union Government, as envisaged by the founding fathers of the Organisation of African Unity and, in particular, the late visionary leader, Dr Kwame Nkrumah, former President of Ghana.