The annual limit, set for now at 33m euros, will be "an alternative to running under the existing rules" which will remain unchanged until 2012 according to a deal reached with the FOTA alliance.
The FIA on Tuesday announced that a voluntary budget cap will apply in formula one next year.
Following a meeting in Paris of the World Motor Sport Council, the body said the annual limit, set for now at 33m euros, will be "an alternative to running under the existing rules" which will remain unchanged until 2012 according to a deal reached with the FOTA alliance.
The budget cap is clearly designed to make the sport accessible to existing and new independent outfits, while allowing the bigger teams to keep spending bigger amounts of money.
The catch for the non-capped teams will be less technical freedom than the capped teams, who will be able to run a more efficient (standard) underbody, moveable wings, and engines without rev limits or frozen development.
Capped teams will also have no limits on testing, and FIA president Max Mosley said a bigger-capacity KERS is a possibility.
"The FIA has the right to adjust elements of these freedoms to ensure that the cost-capped cars have neither an advantage nor a disadvantage when compared to cars running to the existing rules," a statement read.
The 33m figure will cover "all expenditure of any kind", including driver and team boss salaries, and only excluding the motor home and FIA fines.
"These rules will encourage clever engineering -- success will come to the teams with the best ideas, not only the teams with the most money," said Mosley.
He said "very intrusive audits" and the fear of "severe penalties" will deter capped teams from overspending, and that the number of teams allowed in F1 will be increased from the current 12.
"We understand that FOM will pay the cost-capped teams on the same basis as other teams and will also provide $10 million plus the standard transport package for the 11th and 12th teams starting in 2010," added Mosley.