The announcement is likely to anger neighbouring Turkey and has complicated peace talks in Geneva aimed at ending the five-year civil war.
Washington, a key backer of Kurdish fighters in the battle against the Islamic State (IS) jihadist group, has also warned it would not recognise any self-ruled Kurdish region within Syria.
More than 150 delegates from Kurdish, Arab, Assyrian and other parties meeting in northeast Syria agreed to create a "federal system" unifying territory run by Kurds across several Syrian provinces.
"We have given our blessing for the establishment of a federal system in Rojava (three Kurdish cantons) and northern Syria," said Aldar Khalil, a member of the conference's preparatory committee.
The announcement came on the second day of the meeting in Rmeilan, a border town in Syria's northeast Hasakeh province.
Kurdish parties already operate a system of three "autonomous administrations" in Syria's north, with independent police forces and schools.
The three cantons stretch along Syria's northern border with Turkey and are known from west to east as Afrin, Kobane, and Jazire.
The Kurdish People's Protection Units (YPG), the armed branch of the leading Kurdish Democratic Union Party (PYD), has cleared IS from swathes of territory in those areas.
Turkey considers the YPG to be the Syrian affiliate of the Kurdistan Workers' Party (PKK), an outlawed group that has waged a decades-long insurgency against Ankara.
Regime and opposition object
The new "federal system" is expected to centralise governance in the three cantons under councils elected by the people.
A copy of the conference proposal obtained by AFP said Kurds had "accumulated administrative, social, and institutional experience" by running the cantons.
Therefore, establishing a "democratic federation... is necessary", it said.
Officials stressed the federal region would be based on "territorial" lines, not ethnicity, and was not intended as a step towards full independence.
Delegates elected a 31-member "constituent assembly" responsible for implementing the decision on the ground over the next six months, council co-chair Hadiya Youssef told AFP.
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A closing statement distributed to journalists left the territorial boundaries open-ended, saying any areas newly liberated by the YPG could join.
"Our goal is to liberate all areas still controlled by armed groups. We want to liberate Raqa, Deir Ezzor, and all of Syria," Mansour al-Sulum, Youssef's co-chair, told reporters at a closing press conference.
The northern province of Raqa and Deir Ezzor in Syria's east are both IS bastions.
Kurds represent about 15 percent of Syria's population and have tried to avoid confrontation with the regime or non-jihadist rebels since the war broke out in 2011.
Even so, their declaration of a federal region has angered Syria's government and opposition.
Citing a foreign ministry official, Syria's state news agency SANA said the Kurdish announcement "has no legal basis".
The High Negotiations Committee, the main opposition grouping involved in peace talks in Geneva, rejected the proposal as a "misadventure".
The PYD has not received an invitation to negotiations taking place in Switzerland to its dismay.
"The Geneva talks will not succeed without us. We are on the ground, fighting Daesh (IS), protecting our region, and running its affairs," Kurdish delegate Aldar Khalil told AFP.
"All these factors make it difficult for us to fit into the Syrian equation. We are committed to a federal system," Khalil said.
In northeastern Syria, Kurds said the move was a natural step.
"The whole region is heading towards federalism. Syria can never go back to the way it was before," said Jawan Bakhtiyar, 31.
Zana Ibrahim, 38, said the announcement would not change much for him since he already lives under the autonomous Kurdish administration.
"But externally, it will be valuable through the formal recognition that this federation will get," he said.
US State Department spokesman Mark Toner said Wednesday that Washington "won't recognise any self-rule autonomous zones within Syria".
Washington-based analyst Mutlu Civiroglu said the Kurdish announcement was a political message "to the United Nations, the US, Russia, and especially to Geneva, that if you ignore us, we are going to determine our future by ourselves."