The Group of 20 nations has pledged $430 billion in new funding to the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the euro-zone debt crisis.
The promised funds from advanced and emerging economies will provide the global lender with a huge war chest should the sovereign debt problems, that have engulfed three euro zone countries, spread and threaten a fragile recovery.
IMF managing director Christine Lagarde said the decision shows the determination of the international community to provide the IMF with the tools needed to resist and defend against crisis.
"This is extremely important, necessary, an expression of collective resolve," she said.
"Given the increase that has just taken place, we are north of a trillion dollars actually. So I was a bit mesmerised by the amount."
The $1 trillion figure included both the IMF's existing and newly pledged resources, as well as loans already committed.
The IMF would be able to use its increased firepower to help any country or region in need. But Europe's crisis was the driving force behind the push for more funding. Greece, Ireland and Portugal have already received bailouts. Investors now are worried that Italy and Spain, the euro zone's third and fourth biggest economies, will fail to bring down their debt burdens quickly enough to satisfy financial markets.
Worries about the eurozone's debt crisis have dominated talks among finance officials in Washington this week for the semi-annual meetings of the IMF and the World Bank.
The IMF has warned the crisis presents the gravest risk to the global economic expansion.