Settling for a smaller group to move forward on a long divisive issue indicates that the EU is now willing to embrace a multi-speed Europe as a way to strengthen Brussels after the shock of Brexit.
The bloc has for years failed to win unanimity among the 28 member states due to concerns over national sovereignty.
"16 member states notified the three (EU) institutions of their intention to launch an enhanced cooperation to establish a European public prosecutor's office," the EU council said in a statement.
Plans for a European prosecutor first emerged in 2009 to combat fraud that costs the bloc nearly 900 million euros (USD 960 million) a year.
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But they have met resistance from some states who fear a loss of sovereignty as the proposed prosecution office would have powers to operate directly in member states.
In addition to departing Britain, EU founding members Italy and the Netherlands are absent from the group.
The other countries taking part are Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Greece, Spain, Finland, Lithuania, Luxembourg, Portugal, Romania, Slovenia and Slovakia.
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