Users will also have to specifically approve any access Facebook applications have to their friends' information. Such access still would be subject to the friend's privacy and application settings.
"Application developers have had virtually unrestricted access to Facebook users' personal information," Privacy Commissioner Jennifer Stoddart told reporters Thursday. "The changes Facebook plans to introduce will allow users to control the types of personal information that applications can access."
Although the changes stemmed from Canadian privacy complaints, they will apply to Facebook's 250 million users worldwide.
Last month, Canada's privacy commissioner accused Facebook of disclosing personal information about users to the nearly 1 million third-party developers worldwide who create Facebook applications. Stoddart's report also said the Web site breaches Canada's privacy law by keeping a user's personal information indefinitely - even after some members close their accounts.
As part of Thursday's agreement, Facebook will provide users with a clearer distinction between deactivating an account and deleting it, along with a better explanation of how its advertising programs work.
"People will be able to enjoy the benefits of social networking without giving up control of their personal information," Stoddart said.
Facebook said the entire process would take up to a year to implement.
Elliot Schrage, vice president of global communications and public policy at Facebook, said the changes set a new standard for the social networking industry.
Privacy has been a central, often thorny issue for Facebook because so many people use it to share personal information with their friends and family. As the 5-year-old social networking service has expanded its user base and added features, its privacy controls have grown increasingly complicated.
The Palo Alto, Calif.-based company has said it was overhauling its privacy controls in an attempt to simplify its users' ability to control who sees the information they share on the site.
The Canadian privacy commission garnered worldwide attention this summer when Canada became the first country to legally examine Facebook's privacy provisions.
The privacy commissioner launched the probe of Facebook in response to a complaint last year from the Canadian Internet Policy and Public Interest Clinic at the University of Ottawa.
With nearly 12 million Canadian Facebook users, Canada is among the world leaders in per capita usage of the site.