President Emmanuel Macron, meeting in Mali with leaders from the five regional countries involved, said France will provide military support for operations as well as 70 tactical vehicles and communications, operations and protective equipment.
The 5,000-strong force will be deployed by September, and its funding will be finalized by then, Macron said at a press conference.
The leaders of Mali, Mauritania, Niger, Burkina Faso and Chad known as the G5 must clarify their roles and contributions for the force to attract more support from outside countries, the French president added.
The new anti-terror force will operate in the region along with a 12,000-strong UN peacekeeping mission in Mali, which has become the deadliest in the world, and France's own 5,000-strong Barkhane military operation, its largest overseas mission.
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The new force is not meant to replace those missions, Macron said. "It's a force that fights against terrorism, and the trafficking of drugs and humans."
Mali's President Ibrahim Boubacar Keita said each of the Sahel countries would contribute 10 million euros ($11 million) toward the force's overall budget of 423 million euros ($480 million).
Today's meetings came a day after the recently formed extremist group Nusrat al-Islam wal Muslimeen, based in Mali, released a proof-of-life video showing six foreign hostages seized in the region in recent years. The video claimed that "no genuine negotiations have begun to rescue your children."
Macron said he welcomed the first sign of life for several months from the French hostage in the video, Sophie Petronin.
The threat in the region has been growing for years. A French-led intervention drove out Islamic extremists from strongholds in northern Mali in 2013, but the extremists have continued targeting peacekeepers and other forces. Religious extremism has spread south, and attacks have become more brazen.
In March, the extremist groups Ansar Dine, Al-Mourabitoun and al-Qaida in the Islamic Maghreb declared that they had merged into Nusrat al-Islam wal Muslimeen.