The Group of Seven wealthy nations on Friday agreed to end state financing of coal-fired power plants by the end of this year, and to "mostly decarbonise" electricity supplies in the 2030s.
Ahead of a leaders meeting in Britain next month, G7 countries' climate and environment ministers also reaffirmed their commitment to limit keep temperature rises below 1.5 degrees Celsius by 2050, following a two-day virtual meeting.
Scientists say any increases beyond that will trigger uncontrollable climate change.
"Recognising that continued global investment in unabated coal power generation is incompatible with keeping 1.5C within reach, we stress that international investments in unabated coal must stop now," the ministers said.
UK lawmaker Alok Sharma, who is president-designate of the COP26 UN climate summit to be held in Glasgow in November, said the consensus was "a clear signal to the world that coal is on the way out".
The move follows a recommendation from the International Energy Agency earlier this week that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050 and limit warming to 1.5C.
German Environment Minister Svenja Schulze called the agreement "an important step forward" that gave credibility to industrialised nations to urge others to follow suit.
Her French counterpart, Barbara Pompili, said it "sets the stage for a radical transition towards clean energy", hailing Japan, which had resisted, for getting on board.
The G7 countries -- Canada, France, Germany, Italy, Japan, the United States and Britain -- are home to major carmakers, and further agreed to "significantly accelerate" the shift away from petrol in the transport industry within the decade.
Fossil fuels should also be mostly phased out from G7 countries' electricity supplies by the 2030s.
The grouping reiterated that it aimed to eliminate "inefficient fossil fuel subsidies" by 2025 and encouraged all countries to follow suit.
Meanwhile it vowed to "champion" new global biodiversity targets, including conserving or protecting at least 30 percent of global land and at least 30 percent of the global ocean by 2030 to halt, and reverse biodiversity loss.
- 'Vague' -
Nations around the world committed under the 2015 Paris accord to keeping the global temperature increase to under two degrees Celsius and ideally closer to 1.5C by 2050.
However, many of the largest emitters have so far failed to do so and countries have not even agreed on a unified rulebook governing how the Paris agreement works in practice.
Sharma said earlier this month that the upcoming COP summit -- the biggest climate talks since the Paris talks -- were "the last hope" of realistically keeping to the targets.
All G7 nations now have 2030 emissions reduction targets, aligned with 2050 net zero aims.
The German government recently raised the ambition on its emissions reduction targets after a landmark ruling by the country's top court declared a flagship climate protection law "insufficient".
Under the new targets, the government expects to slash emissions by 65 percent by 2030 compared to 1990 levels, going further than the current 55 percent reduction target.
Germany is also aiming to be carbon neutral by 2045, five years earlier than previously planned.
Environmental activists broadly welcomed the commitments struck Friday, but urged wealthy countries to produced more detailed plans and timeframes.
"The commitment on ending international coal funding is a real positive and leaves China isolated globally with its ongoing international financing for the most polluting fossil fuel," said Rebecca Newsom, of Greenpeace UK.
"Unfortunately though, too many of these pledges remain vague when we need them to be specific and set out timetabled action."
Nick Mabey, chief executive of the E3G climate think-tank, said the agreements provided "real momentum" ahead of COP26, pinpointing the deals around investment in coal and other fossil fuels as particularly significant.
"It puts the burden on any fossil fuel development now to prove that it's 1.5C compatible," he told the BBC.