The agreement, covering personal information transferred for law enforcement purposes, follows four years of talks bedevilled by European concerns about revelations of large-scale US snooping.
The deal also helps pave the way for EU plans to collect EU air passenger data, a measure sought by the United States after years of wrangling over how to protect personal information while fighting terrorism and serious crime.
"Once in force, this agreement will guarantee a high level of protection of all personal data when transferred between law enforcement authorities across the Atlantic," EU Justice Commissioner Vera Jourova said in a statement.
"It will in particular guarantee that all EU citizens have the right to enforce their data protection rights in US courts."
Jourova said the deal was an "important step" to "rebuild trust in EU-US data flows."
The US Congress still has to sign the deal for it to become operational.
The agreement would permit EU citizens to seek redress in US courts if personal data released by their home countries to US agencies for law enforcement purposes are subsequently disclosed, US Attorney General Eric Holder said last year.
A key concern in Europe -- where memories of surveillance by fascist and communist dictatorships remain alive -- is the pressure Washington exerts on giant US companies to hand over personal data, including those of EU citizens, on national security grounds.
European concerns were further raised after intelligence leaker Edward Snowden in 2013 released evidence of a massive network of US spy operations on friend and foe alike, including on EU countries.
Jourova said she hoped the EU and US would soon be able to reach a deal on strengthening the voluntary 2001 'Safe Harbour' agreement, meant to ensure US companies respect EU norms on commercial use of personal data.