The scheme denotes by a red, amber and green coding system whether a food has high, medium or low levels of fat, saturated fat, sugar and salt.
Last month five of the UK's biggest food firms adopted a different system focusing on guideline daily amounts.
The food watchdog's board backed the labelling system for its simplicity after a 12-week consultation.
Deirdre Hutton, chairman of the Food Standards Agency, said: "We all lead busy lives, so making healthier choices when shopping needs to be quick and easy.
"Developing a consistent way of clearly highlighting how much fat, sugar and salt a food contains will make it simpler for people to put healthy eating advice into practice when shopping."
That the nutritional criteria used is the same across the board.
The scheme would be applied to ready meals, pizzas, breakfast cereals, sandwiches and meal components such as burgers, pies, poultry, fish and breaded, coated or formed meat.
The impact of the scheme on consumers' choices will be monitored.
However, back in February Kraft, Danone, Kelloggs, Nestle and PepsiCo decided to adopt a system displaying guideline daily amounts (GDA).
This has also been taken up by some supermarkets on their own brand products.
'At a glance'
They argue that their labels with details on calories, sugar, fat, saturates and salt will allow more informed choices as they show what percentage of the recommended daily amount of the key nutrients are contained in a portion.
Martin Paterson, Deputy Director General of the Food and Drink Federation, which represents the firms, said his members were still committed to the GDA labelling.
He said £15bn worth of products will have GDAs on packs by the end of 2006 and that the consensus on them enables companies to develop consistent, complementary approaches to providing prominent on-pack information.
A substantial number of large manufacturers are now rolling out GDA-based front of pack labelling.
However, Dr Susan Jebb, head of nutrition and health research at the Medical Research Council in Cambridge, said the traffic light system gives people "at a glance information" enabling them to quickly see the healthier and the less healthy options.
The FSA said that Sainsbury's and Waitrose are the first retailers to use the recommended colour-coded approach on products and Asda will follow shortly.
It plans to encourage other supermarkets and manufacturers to adopt the four core principles as the basis for their voluntary front of pack schemes.
Christian Cull, Waitrose marketing director, said: "We very much hope that the FSA's formal decision later means that these recommendations are adopted in general."
Public Health Minister Caroline Flint said the FSA recommendations were a step in the right direction.
"We now need to work with the food manufacturers and retailers to ensure we have a consistent approach to food labelling to avoid confusion. The test will be which system works best for shoppers and for health."
Professor Tim Lang of City University's food policy department said the situation was a mess but would test whether the FSA "stands firm for the consumer or caves in to superior food industry forces".
Peter Hollins, Director General of the British Heart Foundation, said: "Unilateral schemes recently announced by some in the industry will confuse consumers and undermine the FSA's system. The FSA's scheme will fail if industry does not fall into line."
Consumer group Which? welcomed the guidelines saying they were flexible enough for all the food industry to adopt.