The credit, which is to be approved by the European Parliament and the Council of Ministers of the EU, aims to help Ukraine economically and financially with the critical challenges the country is facing, including a weak balance of payments and fiscal situation, the European Commission said in a statement on Thursday.
President of the European Commission Jean-Claude Juncker said: ''Ukraine is not alone; Europe stands united behind Ukraine and the reform agenda of the new government."
''Our actions speak louder than our words," he said.
The European Commission said the new loan program would be implemented during the course of 2015 and in early 2016.
The sum is the third lump of financial aid for Ukraine from the EU since 2010.
The European Commission expended €1.36 billion in support of Ukraine in 2014 alone.