Recognising penalty points across the jurisdictions is to be examined
Driving bans will apply throughout the UK and the Republic of Ireland from next spring.
Irish, British and Northern Ireland ministers announced the arrangement following a meeting in Belfast.
It means that Irish drivers disqualified for an offence in the UK will no longer escape that punishment when they return home, and vice-versa.
Northern Ireland Environment Minister Sammy Wilson said the agreement would help protect road-users.
"I believe this will deal with the worst offenders who think that they can disregard the law without consequence when driving outside their own state," he said.
The agreement is the first to be drawn up under the terms of the 1998 European Convention on driving disqualifications and should see mutual recognition of disqualifications between the three administrations in place by Spring 2009.
The three administrations said they would work towards penalty point recognition in the future.