The plans were agreed by the African Union Peace and Security Council during a meeting at the AU headquarters in Addis Ababa, the capital of Ethiopia.
The deployment of troops comes despite an agreement between Somalia's interim government and the Islamic courts not to allow any foreign intervention.
Delegates at the meeting agreed that the first soldiers will be in dispatched by the end of the month but the deployment could run into difficulties as the AU does not have the funds to pay for the troops.
Further talks are expected to resume on 30 October, the BBC reported, as the two sides have already agreed on a united army.
Fifteen years without effective government and struggles between rival warlords over claims on fiefdoms have laid a difficult foundation for the interim government.
Despite its backing of the UN, the interim government's grip on the country remains tenuous as it controls only a small area of the country around its base in Baidoa, about 250 km from the capital.
Even the interim government's position there is in question as a powerful local warlord has already ordered them to leave.
