The instrument will be the first to systematically probe the depths of the forests from space.
"GEDI Lidar will have a tremendous impact on our ability to monitor forest degradation, adding to the critical data needed to mitigate the effects of climate change," said Patrick O'Shea, chief research officer at the University of Maryland.
It is a laser-based system that can measure the distance from the space-based instrument to Earth's surface with enough accuracy to detect subtle variations, including the tops of trees, the ground, and the vertical distribution of above ground bio-mass in forests.
The instrument will be built at Nasa's Goddard Space Flight Center in Greenbelt, Maryland, a Nasa release said.
"GEDI will be a tremendous new resource for studying Earth's vegetation," said Piers Sellers, deputy director of Goddard's Sciences and Exploration Directorate.
In particular, the GEDI data will provide global-scale insights into how much carbon is being stored in the forest bio-mass.
"This information will be particularly powerful when combined with the historical record of changes captured by the US's long standing programme of Earth-orbiting satellites, such as Landsat and MODIS," Sellers added.
By revealing the 3D architecture of forests in unprecedented detail, GEDI will also provide crucial information about the impact that trees have on the amount of carbon in the atmosphere.
Although it is well-established that trees absorb carbon and store it long-term, scientists have not quantified exactly how much carbon forests contain.
As a result, it's not possible to determine how much carbon would be released if a forest were destroyed, nor how well emissions could be countered by planting new trees.
The system is one of two instrument proposals recently selected for Nasa's Earth Venture Instrument programme and is being led by the University of Maryland, College Park.
Nasa said GEDI is scheduled to be ready in 2018.