The move followed a similar decision by most EU member states to recognize the Stalinist state as it starts to emerge from decades of self-imposed isolation and to build ties with affluent South Korea.
"It is hoped that this (decision) will facilitate the European Community's efforts in support of reconciliation in the Korean Peninsula, and in particular in support of economic reform and easing of the acute food and health problems," the Commission said in a statement.
The South Korean Foreign Ministry welcomed the EU announcement:
"The decision of the EU and North Korea to establish diplomatic relations will positively contribute to achieving peace and stability on the Korean peninsula and improving inter-Korean relations," the ministry said in Seoul.
Among the 15 EU states, only France has so far refused to consider establishing diplomatic ties with Pyongyang.
Chris Patten, European Commissioner for External Affairs, told reporters the Commission had still to discuss with Pyongyang the details of opening its mission in North Korea.
"We very much hope it will lead to an early discussion on human rights and the situation of humanitarian missions working in North Korea," Patten added.
Earlier this month, Patten traveled to Pyongyang with Swedish Prime Minister Goran Persson and EU foreign policy chief Javier Solana for talks with North Korea's reclusive leader Kim Jong-il. It was the first such European mission to Pyongyang.
Sweden holds the EU's rotating six-month presidency. The EU is already a major donor of aid to Pyongyang.
Despite the thawing of relations, EU officials have said they don't expect differences to be resolved immediately. Last week, the European Commission's top foreign policy official gave a cautious assessment of his visit to Pyongyang.
"I'm not a starry-eyed optimist about human rights or other issues in North Korea," Patten said.
"We're at the beginning of ... a very long and winding and stony road," said Patten, Britain's last colonial governor of Hong Kong.
Patten and other members on a high-level delegation to both capitals on the Korean peninsula secured pledges from the North to extend a moratorium on missile testing and to open discussions on human rights.
©MMI Viacom Internet Services Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and Reuters Limited contributed to this report