Republic of Ireland and Northern Ireland join Wales in League B while Scotland are consigned to League C given their ranking of 27 in Europe.
UEFA says it "creates more meaningful and competitive matches for teams and a dedicated calendar and structure for national team football".
So how does it work?
All the teams has been split into four levels, with one team from each League guaranteed a spot at Euro 2020.
The top team in each group will be promoted and the bottom team relegated for the next Nations League competition which takes place in 2021.
A freaky new system will see the four best placed teams in each group who have not qualified for Euro 2020 take part in a play-off with one spot at the tournament each allocated to the four groups.
The competition will run alongside qualification for Euro 2020 and is an attempt by Uefa to revive global football by providing teams with more competitive fixtures against teams of a similar standard.
Martin O'Neill's side will know their opponents when the draw is made in Lausanne, Switzerland on 24 January.
League A includes the likes of world champions Germany, reigning European Championship winners Portugal, France and England.
The Uefa Nations League group games will take place during worldwide breaks in September, October and November 2018 and the four top group winners will play off in the summer of 2019.
A host country will be appointed in December 2018 from the finalist teams.
The Republic of Ireland have been drawn in League B alongside Northern Ireland and Wales.
Each of the four Nations League "Leagues" will have four play-off spots available for group winners, meaning 16 teams will go into four, four-team mini-tournaments to vie for four places at Euro 2020.
League C contains Hungary, Romania, Scotland, Slovenia, Greece, Serbia, Albania, Norway, Montenegro, Israel, Bulgaria, Finland, Cyprus, Estonia and Lithuania.
In a similar format, the four group winners will advance to the semi-finals.
Division D: Azerbaijan, Macedonia, Georgia, Belarus, Armenia, Faroe Islands, Latvia, Luxembourg, Kazakhstan, Moldova, Liechtenstein, Malta, Kosovo, Andorra, San Marino and Gibraltar.
The winners of the four groups in League A will qualify for the Final Four competition.