The announcement means the WRU is committed to launching a representative team which can grow in status as it becomes more competitive.
This major boost for rugby in North Wales will exploit the growth in the elite player base in the region and aim to prevent the future loss of talent to other sports and to clubs in England and beyond.
Now the working party will report back in six months time on how and when to introduce the new representative team to competition.
One idea to be discussed is to invite the team called Gogledd Cymru to compete against development teams being established by the four Regions of Wales.
An alternative plan could see the team introduced into Premiership level to compete with the south Wales based semi professional teams.
These options are just two of the ideas being considered and a full debate with all the rugby stakeholders in Wales will now take place.
The working party will also consider the funding of the new side and the administrative and coaching structure required to deliver its success.
The WRU says that calling North Wales a development region will clarify the commitment to building an elite representative player base there.
The plan is to introduce the development team for season 2010/2011 provided full agreement is reached by then on its structure and financial viability.
The high powered working party will include the North Wales district representative on the WRU Board, Peredur Jenkins, the chairman of the WRU finance committee Martin Davies and Gerald Davies who chaired the North Wales Strategic Plan committee.
They will be joined by the WRU Group Chief Executive, Roger Lewis, Head of Operations Tim Burton, Director of Finance, Steve Phillips and the new Head of Rugby Development when appointed.
WRU Group Chief Executive, Roger Lewis, said, "We are committed to developing rugby in North Wales to a level which ensures every one of our young players has a clearly defined and simple route onto the pathway to the top.
"We want to make sure that any player capable of developing into a senior Welsh international is captured and nurtured within our structure.
"The recognition of North Wales as a development region and the establishment of this working party are major steps forward in our focus on the north.
"We want to label North Wales as a development region to ensure everyone understands our total commitment to nurturing all available talent there in the most appropriate and meaningful way.
"Our priority is to ensure maximum engagement and participation at all levels in North Wales in order to build strong foundations for the game in the region.
"North Wales already boasts some 3,000 active rugby players which makes it strategically important for the development and sustainaility of our national game.
"There have been huge steps forward particularly in age grade rugby in the north with U16 and U18 representative teams competing in the WRU Regional Age Grade Championships.
"The move we have announced today recognises that the work already being done is developing more and more North Wales players with potential to succeed at the highest levels of the game.
"We have a strategic plan in place for North Wales and this step forward represents progress in achieving its aims.
"Wales is a small nation and Warren Gatland needs every single potential international player to be recognised, nurtured and fully developed."
WRU Board Director, Peredur Jenkins, added: "I am delighted that the Board of the WRU has afforded North Wales the status of a development region.
"This means we can work to create a senior representative side which can grow in stature and become a focal point of support for the thousands of rugby supporters in the north.
"The talent, enthusiasm and drive are already in place and now we can work towards establishing a mature and clear pathway into representative rugby for our players.
"I am confident this represents an important milestone in the work the WRU is doing to nurture and develop rugby in the north.
"We are proud of our record of producing international players for Wales and I am confident that role of honour will get considerably longer in the future."