The deal came at a major U.N. meeting of environment ministers in Kenya after President Barack Obama's new administration said on Monday the United States had reversed its stance on the issue and was now in favour of a legal ban.
"This is truly good news and I hope that citizens across the world will embrace this decision," U.N. Environment Programme (UNEP) head Achim Steiner told a news conference.
"Today the world's environment ministers, armed with the full facts and full choices, decided the time for talking was over but the time for action on this pollution is now."
About 6,000 tonnes of mercury -- which has been known for more than a century to damage the human nervous system—enter the environment every year. Mercury's other effects include liver damage, memory loss or disturbances to vision.
Of the total, 2,000 tonnes is from coal burnt in power stations and homes. Increased coal use in Asia means emissions may be rising, UNEP experts fear.
Western countries have slashed their usage of mercury, but activists say poorer nations are increasingly relying on it for processes including small-scale gold mining.
The new agreement covers a package of measures aimed at reducing demand in industrial products and processes, while also seeking to cut emissions to the atmosphere and clean up contaminated sites.
The European Union had already called for an international treaty, and hopes were high ahead of this week's meeting that the new U.S. government would reverse its predecessor's stance and support that. Some states favour a voluntary approach.
Preparations for negotiations on the treaty will start later this year, officials said, with discussions beginning in earnest in 2010 and aiming to wrap up by 2013.
Anti-mercury campaigners hailed Friday's unanimous agreement, saying the U.S. U-turn had encouraged other countries, notably India and China, to back the proposal.
"This was made possible by President Obama's global view and the inspiration and momentum generated by it," said Michael Bender, director of the U.S. Mercury Policy Project and the Zero Mercury Working Group.
