The wave function of the universe defines all physical possibilities. Quantum decoherence is what transforms the wave function into specific versions of physical reality. This is an interference effect that alters the structure of the wave function, producing essentially classical states. This is what transforms the amorphous fundamental wave function into an ordinary world of the sort we are used to.
It has been proposed that this phenomenon explains the whole problem of the collapse of the wave function, and thus resolves the measurement problem. However, as stated by the physicist Guido Bacciagaluppi, a philosopher of physics mainly working on quantum mechanics:
Unfortunately, naïve claims of the kind that decoherence gives a complete answer to the measurement problem are still somewhat part of the ‘folklore’ of decoherence, and deservedly attract the wrath of physicists (e.g. Pearle 1997) and philosophers (e.g. Bub 1997, Chap. 8) alike. (2012)
This is from his article The Role of Decoherence in Quantum Mechanics in the Stanford Encyclopedia of Philosophy where there is a full discussion of the issue. The measurement problem continues to be acknowledged as an unresolved problem.