Representatives of more than 40 nations and international institutions have agreed at the Libya Conference in London that Muammar Gaddafi and his regime have "completely lost legitimacy and will be held accountable for their actions".
Foreign Secretary William Hague hailed the conference as "a significant milestone" in allowing the Libyan people to determine their own future.
Sweden has agreed to join Nato military operations in Libya, while the coalition enforcing United Nations Security Council resolutions in the country has been "widened and deepened" and a new Libya Contact Group has been established to co-ordinate the international response, said Mr Hague.
He told a press conference at the Foreign Office: "We have said throughout that we want the Libyan people to be in the lead in determining their future and today was a significant milestone in that process.
"It comes at a time when the forces of the Gaddafi regime continue to shell civilians in Misrata and Zintan in an indiscriminate and brutal manner, underlining why our efforts to protect Libyan citizens must and will continue."
Mr Hague read from a letter he had received from a member of the local council in Misrata, thanking Britain and its allies for coming to the aid of the Libyan people "in their most needy of hours".
He said the letter confirmed that allied air strikes in the Misrata area had been accurately directed at military targets of the Gaddafi regime and had caused no civilian deaths or injuries.
Mr Hague said the conference had not discussed calls - from the main Libyan opposition group who he met for talks before the conference - for the rebels to be supplied with arms. However, he appeared not to rule out the possibility in the future.
"It was not on the agenda for discussion," he said. "It is not part of any agreement today."
The conference has brought together all members of the coalition involved in the military operation, as well as the United Nations, Nato, the African Union and the Arab League. Prime Minister David Cameron said the international coalition would continue the action needed to implement United Nations Security Council resolutions "as long as is necessary" to protect the population from attacks by Gaddafi's forces.