The agreement is backed by the International Basketball Federation (FIBA).
"This is excellent news," stated Patrick Baumann, secretary general of the world governing body.
"Just two months after we met with all the stakeholders of basketball in Great Britain, and only a few days after the FIBA Central Board paved the way for a Great Britain team, a formal agreement is in place.
"This is an exciting development that can lay the foundation to have competitive host teams for the 2012 Olympic basketball tournaments for men and women."
FIBA Europe has supported the move with a key development allowing British men's and women's teams to compete in Europe at senior and Under-20 level; while the home countries also retain the right for their senior teams to compete at a lower level to that of the respective British team.
The home countries also retain their individual age-group (U-14, U-16 and U-18) teams' programmes and the right to compete in FIBA Europe competitions.
To achieve a place at the 2012 London Games, both the men's and women's teams will be required to demonstrate that they are competitive in European Basketball.
