The heads of the three countries, who took power through coups in recent years, "decided to take a step further towards greater integration between the member states" and "adopted a treaty establishing a confederation", they said in a statement at the end of Saturday's summit.
The "Confederation of Sahel States", which will use the acronym AES, will group some 72 million people.
The three countries in January said they were quitting the Economic Community of West African States (ECOWAS), an organisation they accused of being manipulated by France, their former colonial ruler.
The three countries have all broken their military and defence links with France, seeking greater cooperation with Russia.
"Our people have irrevocably turned their back on ECOWAS," said General Abdourahamane Tiani, the head of Niger's military government as he opened the summit.
Relations between ECOWAS deteriorated following a July 2023 coup that brought Tiani to power, when ECOWAS imposed sanctions and even threatened to intervene militarily to restore the ousted president, Mohamed Bazoum.
The sanctions were lifted in February but relations between the two sides remain frosty.
ECOWAS is holding a leaders' summit Sunday in Abuja where the question of relations with AES will be on the agenda.
The AES countries in March created a joint military force to combat the jihadist groups that regularly attack their territory.
Saturday they also talked about "mutualising" their approach to strategic sectors such as agriculture, water, energy and transport.
They also asked that indigenous languages be given greater prominence in local media.
bh-pid/gv/imm
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