The government and federal member states said Sunday that direct universal suffrage would be introduced with local elections set for June 2024.
The move follows a pledge by President Hassan Sheikh Mohamud in March to end a complex indirect system in place since 1969.
“The basic principles should be that the election of the Federal Somali Republic must be one that gives the public the opportunity to cast their votes democratically in a one-person, one-vote system,” the government said after reaching an agreement with state leaders.
The reform aims to “encourage the multiparty political system” that is independent and “corruption free”, it added.
Somalia is struggling to emerge from decades of conflict and chaos, but is battling a bloody Islamist insurgency and natural disasters including a punishing drought that has left millions facing hunger.
The country has not had one-person, one-vote elections nationwide since 1969, when the dictator Siad Barre seized power.
State legislatures and clan delegates pick lawmakers for the national parliament, who in turn choose the president.
But rivalries between the clans have resulted in decades of strife and political wrangling, which in recent years have been exploited by the Al-Shabaab militants