The agreement would make it illegal to take organs from people living or dead without their free and full consent, according to the text drafted by members of Europe's top rights body, the Council of Europe.
The treaty also bans making money off transplants and gives victims the right to compensation which could cover the costs of injury and medical treatment.
Belgium, Britain, Italy and Turkey are among the 14 European nations which signed the treaty at a two-day international conference on human organ trafficking which got underway Wednesday in Santiago de Compostela in northwestern Spain.
"This is one of the most exploitative trades on the planet," Council of Europe secretary general Thorbjoern Jagland said at the conference.
"The so-called donors are the impoverished, the weak, the orphaned, the uneducated, the vulnerable. But they and the recipients are exposed to surgeries in which there are no medical guarantees in a market which damages public health."
The World Health Organization estimates that some 10,000 black market transplants are carried out every year, a problem that frequently involves international crime.
Human organ trafficking is one of the world's top ten illegal money-making activities, generating an estimated $1.2 billion (1.1 billion euros) in illegal profits globally each year, Jagland said.
There have been cases in the Ukraine where recipients have paid up to 200,000 euros for a kidney, he added.
At least five countries have to ratify the agreement, which is open to all countries, before it takes effect.
It is the first international treaty aimed at preventing and combating trafficking in human organs, according to the Council of Europe.
The treaty will make it easier for national police forces to share key information and work together to close in on trafficking rings because states will be operating under the same legal framework, Jagland said.
"Illegal organ trading preys on the desperate and reduces human beings to the price tag that can be attached to their body parts. Today we begin closing the loopholes which are exploited by the perpetrators," he said.
Other countries which signed the treaty include: Albania, Austria, the Czech Republic, Greece, Luxembourg, Norway, Moldavia, Poland, Portugal and Spain.