The decision to form such a council was taken at the Southern Forest Ministers' Conference held here, Kerala Forest Minister Thiruvanchoor Radhakrishnan said.
The Southern Forest Ministers' Inter-State Co-Ordination council would initiate standard operating procedures to tackle the forest-related problems in the region, he said.
Under the Interstate council, a full-time secretariat will function in the respective Forest Departments, he said.
For the first year, Kerala Forest Minister will be the President of the council, he said.
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Andhra Pradesh Forest Minister B Gopalakrishna Reddy said he had sought the support of the southern states for protecting the red sander forests in the state.
To a question, Karnataka Forest Minister Ramnath Rai said his government would take early action in resolving the issue of night traffic ban on Kozhikode-Mysore-Kollegal NH 212.
However, he said an expert committee had been set up and its report was awaited.
Telengana Forests Minister Jogu Ramanna said biodiversity conservation can be strengthened with the participation of the local people.
Inaugurating the conference, Chandy said protection network in forests had to be strengthened with modern technology like satellite-based communication systems, early warning systems, drones and radio collars to preserve forest wealth from poachers and smugglers.
He said some recent incidents of elephant poaching in Kerala and red sander smuggling in Andhra Pradesh point to a worrying re-emergence of organised criminal gangs.
"This demands a closer and cohesive approach among us as they have trans-border repercussions", he said.
Meanwhile, Thrissur-based Heritage Animal Task Force, an animal rights group, said the meeting failed to find out a solution to curtail the "underground activities of forest mafia" in the Western Ghats, a rare biodiversity hotspot in the region.