The decision follows a meeting in Zurich between UEFA's president Lennart Johansson and director of professional football and marketing Lars-Christer Olsson and Karl-Heinz Rummenigge, chairman of the European Club Forum.
Rummenigge is also chairman of the G-14 group of leading clubs, which last month sent a formal request to both UEFA and world soccer's governing body FIFA for compensation when players are on duty in World Cup and European Championship finals.
The clubs are unhappy with the distribution of finances and UEFA said the investigation would look at the balance between clubs and national associations.
"We are moving forward to a sensible way on distribution issues and in the best interests of the whole of European football," Johansson said.
Rummenigge added: "I think the proposed investigation is a helpful move, which will allow European football to consider the full picture of the current distribution system."
UEFA said the findings of the investigation will be reported to national associations and the European Club Forum early in 2004.
The G-14 clubs meet in Lyon on November 18 to discuss the next step in their claims for compensation for players released to World Cup and European Championship finals.
The European Club Forum, which represents 102 clubs, was set up in June 2002 to reinforce and improve the consultation and dialogue process between UEFA and clubs.
