Three-on-three, which is played over three periods on half a court with one hoop, will make its debut at the Youth Olympic Games in Singapore in August.
"It's not an alternative but it's an add-on and we will have it at the Olympics in 2020/2024," the International Basketball Federation's (FIBA) Patrick Baumann said.
"Three on three will develop. The Youth Olympic Games is the first step then we will have probably have a World Cup and Masters series starting in two years then you create a generation of professional players."
FIBA hopes the format will appeal to those who play the sport for fun.
"It's a product that the kids and the youth play out there for their pleasure and which hasn't really been part of anything," said Baumann who added that three times as many people played basketball as soccer.
"It's a free game, you go when you want, you play with who you want...and it's already out there. What it is not, it's not part of a worldwide community of three-on-three basketball players. That's where I think we have an amazing opportunity to just create a tsunami of basketball players."