The leaders from Mali, Chad, Niger, Burkina Faso and Mauritania made the announcement at a summit in Bamako.
The agreement includes the setting up of a joint counter-terrorism force to tackle the jihadist threat in the region.
President IDRISS DEBY of Chad said members of the G-5 group were on the frontline against terrorism.
The group called the meeting in Bamako following an attack last month near the Malian city of Gao, which killed nearly eighty people