The initiative comes in response to changing consumer preferences regarding sugar intake and calls from member states and the European Commission for a coordinated approach to sugar reduction.
The sector will use smaller pack sizes and encourage consumer choice towards low and no calorie drinks to achieve its ambitious target.
The soft drinks sector is an early mover in added sugars reduction which goes back to the 1970s, when the first no sugar and calorie soft drinks were introduced.
In soft drinks, reduction in added sugars leads directly to reduced calories. The industry reduced sugar in still and carbonated soft drinks by 12 per cent from 2000-2015, so the new commitment triples this pace of change by reducing another 10 per cent over the next five years.
The committed 10 per cent is an aggregate and takes into account existing and new local industry pledges on sugar reduction, reflecting specific national diets and consumer preferences in the EU.
The initiative addresses consumer preferences regarding sugar and calorie intake. It is also a response to the EU's call for reformulation and sugar reduction across the food industry.
The industry will achieve its target by stepping up efforts on reformulation and new product innovation - including by using low-and no-calorie sweeteners - and increasing the availability of smaller pack sizes to allow portion control and moderation.
In addition, soft drinks producers will invest in the promotion of beverages with reduced or no sugar to actively encourage consumer choice towards low and no calorie products.
Announcing the move on Tuesday, Stanislas de Gramont, President of UNESDA Soft Drinks Europe and CEO of Suntory Beverage and Food Europe said, "We welcome the EU's policy approach to reformulation and sugar reduction which is based on partnership and allows us to deliver speed and scale.
"This 10 per cent sugar reduction commitment represents a tripling of the pace of our efforts to date. We will need to employ a wide array of tools in order to achieve our ambitious target and we hope other food categories will follow suit in order to generate critical mass."
Dan Sayre and Nikos Koumettis, Presidents of Coca-Cola's business units in Europe said, "As a company, we have always grown by listening and responding to our consumers, stakeholders and society at large.
"We agree that too much sugar isn't good for anyone and want to enable consumers to better control their intake of added sugar. We believe that this and the other actions we are taking will help more people make the right decisions for them and their families."
Further comment came from Richard Evans, PepsiCo Europe and Sub Saharan Africa President category teams, franchise and Africa, who added, "Companies like PepsiCo have a tremendous opportunity - as well as a responsibility - to not only make a profit, but to do so in a way that makes a difference in the world.
"We were first movers in reformulating products for lower calories but we recognise that more must be done to help people manage their calorie intake.
Evans said, "Working together with our industry peers, this accelerated programme to reduce sugar is one of the ways we are bringing our performance with purpose vision alive. We aim to deliver strong financial performance sustainably over time in a way that is responsive to the needs of society."