The European Tour will stage the richest golf tournament in the world when Dubai hosts a £4.88m ($10m) season-ending event from 2009.
The Race to Dubai will get under way in November 2008
The top 60 on the money list will play in the season finale, the Dubai World Championship, with the winner set to earn $1,666,660 (£813,800).
The European Tour will divide a further $10m among its top 15 and rename its Order of Merit the Race to Dubai.
The winner of the race, to include the new event, will receive a $2m bonus.
Players will be ranked according to their earnings from all events on the European Tour International Schedule, including all European Tour tournaments, the majors and the World Golf Championships.
"The sums involved are staggering and add to the already rampant inflation that dictates golf prize money," said BBC Radio 5 Live golf correspondent Iain Carter.
European Tour chief executive George O'Grady added: "It will bring a new dimension to the Tour.
"(It will create) great drama and theatre throughout the year as all the best players in the world are given the opportunity to compete in the world's richest tournament.
"Moreover, as the European Tour has become ever-more global in its outlook it has become increasingly important to us to have an international base in a strategically-placed location."
The European Tour's new international headquarters will be established at Jumeirah Golf Estates, which will host the inaugural Dubai World Championship between 19-22 November, 2009.
The changes come on the back of an increasing number of European players opting to take part in the PGA Tour in America.
Its season-ending event, the FedEx Cup, offers £4.8m to the winner.
England's Justin Rose claimed last season's Order of Merit title at the Tour finale, the Volvo Masters.
That event was marred by the absence of Ernie Els who was leading the money race but was contracted to play at the Singapore Open instead.
"We take our share of the blame for the scheduling conflict between the Singapore Open and the Volvo Masters," O'Grady told BBC Radio 5 Live.
He added: "We can't be finishing the European Tour schedule in late October now.
"The PGA Tour have raised the bar in terms of tournament promotion and I'm a great admirer of everything they do, and they've just made us sharpen our act."