EU and Cuban officials signed the agreement, the culmination of nearly two years of intense negotiations, during a visit to Havana by European foreign policy chief Federica Mogherini.
"This is a historic step in our relationship," Mogherini said.
The EU had suspended relations with Cuba in 2003 over a crackdown on journalists and activists, and had since 1996 officially used its foreign policy to encourage human rights advances in the country.
"This accord marks the end of the common position," said Mogherini at the signing ceremony.
The EU had said it was seeking a more constructive approach to engage Havana and persuade President Raul Castro's government to sign several international human rights treaties.
Cuba was previously the only country in Latin America without an international cooperation deal with the EU.
The two sides began talks on restoring ties in April 2014.
They had moved to accelerate the process after Cuba and the United States announced a historic rapprochement in December 2014 and renewed diplomatic relations in July.
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