After a tense all-night meeting, ministers said a ban on “discards” should be phased in, starting in January 2014 for certain types of fish.
Ministers agreed some exemptions to the ban – but the European Parliament may still refuse to accept them.
It is a victory for campaigners who have demanded the end of a practice that has brought the EU into disrepute.
The UN says Europe has the world’s worst record of throwing away fish. Almost a quarter of all catches go back overboard dead because they are not the fish the crews intended to catch.
The decision reached early on Wednesday morning was driven by northern European nations.
They prevailed over mainly Mediterranean countries, which were fighting to protect the interests of their fishermen.
The ban will apply to pelagic stocks like herring and whiting from next year and to white fish stocks from January 2016.
Spain, France and Portugal managed to cling on to some restricted exemptions, particularly relating to crews operating far from land in mixed fisheries where the cost of landing unwanted fish is deemed to be prohibitive.
These crews will be allowed to discard 9%, shrinking to 7%. This figure is too high for the northern nations and the European Commission, which say the public expects that in a hungry world no fish should be thrown away.
Details of how exactly the discards ban will work in practice with the quota system or its projected replacement will be debated later.
The deal builds on a recent commitment to fish sustainably, and to allow more regional decision making. Many crucial details are still to be resolved over exactly what sustainably means, how the policy is enforced, how fishing crews are supported and how they are helped to buy gear that fishes more selectively.
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