The men's and women's series kick-off in February with the aim of developing the next generation of rugby players and growing the popularity and participation of sevens around the world.
World Rugby chair Sir Bill Beaumont said: "We are thrilled to launch the World Rugby Sevens Challenger Series in a pivotal year for rugby sevens ahead of the Tokyo 2020 Olympic Games".
"Rugby sevens continues to attract new fans around the globe with its fast-paced, athletic and highly skilled format. The new Sevens Challenger Series will help to develop the next generation of players and bring international sevens events to new nations, further growing the popularity of our Olympic sport around the world."
The men's series will feature 13 core teams from the six World Rugby regions, who will compete over two rounds alongside three invitational teams. The inaugural legs will be played in Viña del Mar in Chile and Montevideo in Uruguay.
Chile, Uruguay and Brazil will represent South America in the competition, which also features Germany, Hong Kong, Italy, Jamaica, Japan, Papua New Guinea, Portugal, Tonga, Uganda and Zimbabwe.
The teams, who will be joined by three invitational sides from the Americas: Colombia, Mexico and Paraguay, earned their place by finishing as the top ranked teams in their respective regional sevens competitions.
The top eight ranked core teams after two legs will then compete in a final playoff tournament, played alongside the Hong Kong Sevens in April, for a spot in the World Rugby Sevens Series, replacing the bottom placed team in the current campaign.
A separate announcement for the women's Challenger Series will soon be made.
World Rugby Head of Competitions and Performance Mark Egan said this was just the beginning.
"(The Sevens Challenger Series) will evolve to feature more rounds across the globe as it grows and develops in future years," he said.
"The competition will allow unions outside of the HSBC World Rugby Sevens Series to compete on a more regular basis with a clear pathway to the highest level.
"Launching next year will provide an excellent platform for nations to develop and improve their competitiveness ahead of Tokyo 2020 and Rugby World Cup Sevens 2022 in South Africa.