Nike chairman and founder Phil Knight said the company also planned to improve air quality at plants, allow more independent monitoring and offer free educational classes.
Mr Knight said: "In the last couple of years, we've really been under the spotlight. We've been working hard and this is what we've put together."
Currently, the minimum age for workers in Indonesia is 14, but Nike hires no one younger than 16. The company said it would boost its minimum age for apparel and accessories factories to 16. In some of the other countries where Nike goods are manufactured - Pakistan, Vietnam, and China - children aged 12 or younger work to produce clothing or accessories, such as footballs. For its footwear factories, the minimum age will go up to 18.
The new policy applies only to those hired from now on. No current workers who are younger than the new minimum age will lose their jobs.
Nike, the largest athletic footwear manufacturer in the world, has been heavily criticised for the conditions at factories in Asia that operate under contract. Workers were said to be poorly paid and forced to work long hours in gruelling conditions.
In Indonesia, Nike has long contended that conditions and wages in its factories are better than most. Mr Knight said: "We've said before and we're kind of reiterating that in terms of companies that we compete with and industries that we're related to - shoes, apparel, toys - that Nike is far and away the leader in terms of having the best factories and factory conditions."
He said Nike wanted to share knowledge with other companies, including use of a new water-based glue that it says dramatically reduces air contamination in factories where oil-based glue has been used in the past.
Mr Knight said Nike would adopt US Occupational and Health Administration standards for air quality inside the factories, and extend programmes to provide free education classes. By 2002, Nike says it will only order footwear from factories that offer some kind of educational services during off-work hours.
The company has recently reported stagnating sales after years of rapid growth. Nike announced in March that quarterly profits had fallen by nearly 70 per cent.Reuse content