Uefa general secretary Gianni Infantino said: "The main rule is the break-even requirement which will be phased in over the next three years.
"It is not as easy to swallow for everyone but everyone understands it is necessary. They are there not to punish clubs, they are there to help clubs. We don't want to kill anyone, this is why we have a phased-in approach."
But money invested in stadiums and youth development will not be included in the number-crunching.
The rules will also forbid clubs owing money to their rivals, players and staff or the tax authorities at the end of the season.
Portsmouth were a glaring example of a club which owed millions in unpaid transfer fees, image rights, tax and VAT.
Earlier this year, Infantino estimated 50% of clubs in Europe were making losses and 20% were in financial peril.
Big transfer fees can still be paid but clubs will need to generate sufficient funds through ticket sales, TV money and commercial revenue.
"If clubs want to spend 50, 60 or 70 million, why not, provided they have the money coming from their revenues, this will continue in the future. The problem is when you don't have the money," Infantino added.
The European Clubs' Association's president, former German international Karl-Heinz Rummenigge, welcomed the move, commenting: "The measures will shape the future of European football into a more responsible business and ultimately a more sustainable one."
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.