The route -- aimed at testing "automated and connected driving in real cross-border traffic" -- will stretch around 70 kilometres (43 miles), from Merzig in Germany's western Saarland state to Metz in eastern France.
"Manufacturers will be able to test the connectivity of their systems, for example when lanes or speed limits change at the border," German Transport Minister Alexander Dobrindt said in a statement following a meeting with French counterpart Alain Vidalies.
"We want to set worldwide standards for this key technology through cooperation between Europe's two biggest car-producing countries," he added.
The route will allow testing of 5G wireless communications between cars and infrastructure, automated manoeuvres such as overtaking and braking, and emergency warning and call systems, among others.
Germany, home to car giants such as Volkswagen, Daimler and BMW, already boasts a number of test zones for automated vehicles on motorways and in cities, but this is the first that will cross into another country.
The transport ministry has offered 100 million euros in funding for the projects.
The tests come as the nation's traditional carmakers are racing to catch up to Silicon Valley newcomers such as Tesla, Uber and Google parent company Alphabet in the new field, seen as the future of driving.
Automated trucks in particular are expected to shake up the road transport sector in the years to come.
In a glimpse of what lies ahead, manufacturers took part in an experiment last year that saw six convoys of "smart" trucks cross several European countries using "platooning" -- in which a leading truck sets the route and speed for wirelessly-connected, self-driving followers.
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