NGT plants are created when a small part of their DNA is added, removed or altered using genetic editing tools, as opposed to older GMO techniques, which involve introducing genetic material from one different organism into another to make a hybrid.
Leading agriculture unions support the new technique for developing crops that are more resistant to the effects of climate change or require less fertiliser and pesticide.
"The Council has reached a provisional agreement with the European Parliament on a set of rules that establish a legal framework for new genomic techniques (NGTs)," they said in a statement.
"The regulation aims to improve the competitiveness of the agrifood sector and ensure a level playing field for European operators, while boosting food security and reducing external dependencies," they added.
Proponents say some NGTs only speed up genetic modifications that could have come about naturally or through traditional crossbreeding procedures.
Swedish MEP and the European Parliament's rapporteur on the issue, Jessica Polfjard, welcomed the agreement.
The technology will lead to plants that are climate resistant and produce higher yields on smaller spaces, she said.
The agreement eases current rules for some NGT plants that fall under category 1, considered to be equivalent to their naturally occurring varieties.
NGTs that are resistant to herbicides or produce insecticides will not be allowed on the market, while in organic farming, no NGTs will be allowed
Both NGT and older GMO techniques have their critics in the EU who fear unpredictable impacts on the environment or food chains.
Copa Cogeca, an umbrella organisation for major European farmers' unions, and major seed companies had called for the rules to be simplified on the grounds of Europe's competitiveness against the United States and China, who authorise NGTs.
But environmental groups and the organic farming sector oppose it.
Charlotte Labauge, from the Pollinis NGO, highlighted a lack of labelling on finished products.
Under the agreement, the presence of category 1 NGT must be indicated on bags of seeds purchased by farmers but not in the labelling of the final product.
The issue of tracability as well as the patents of NGT plants prompted months of debate within the European Union.
The agreement needs to be approved a final time by member states and the European Parliament to enter into effect.
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