Real vodka must be made from grain or potatoes, and vodkas made from anything else must say so clearly on the label.
But lawmakers stopped short of banning the use of the word "vodka" for spirits made from other ingredients, such as sugar beet or fruits, a move that experts said could have provoked trade disputes with countries like the United States and Brazil.
The rules - replacing guidelines from 1989 - were needed to ensure the quality of spirit drinks and guarantee their exclusivity, the EU said. They also define the labeling of products such as the Czech Republic's Slivovice, Greece's Ouzo and Germany's Rum-Verschnitt, among others.
The booming world vodka market is worth around US$12 billion (9 billion EUR) in annual sales.
Parliamentarians from traditional vodka-producing countries, such as Finland, Poland and Sweden, had pushed for stronger rules that would effectively have expelled vodka producers from other continents from the European market.
But the compromise rules, approved by a show of hands, have been backed by all EU governments with the exception of Poland and are likely to be endorsed by EU ministers in September, officials said.
The current EU definition states vodka is "a spirit drink produced from ethyl alcohol of agricultural origin".
"We have made vodka out of potato and grain for over 500 years. When we became EU members in 1995 we were told that vodka would have a tight definition, just like rum, just like whisky, just like grappa. We don't want vodka to be some kind of alcoholic wastebasket," said Finnish deputy Alexander Stubb.
Finland's government has, however, already said it would back the looser rules.
Pitched against traditionalists was a group led by Britain, the Netherlands, France and Austria - and backed by London-based multinational drinks producer Diageo - which take a more relaxed view of what can go into vodka, for example grapes, beets or citrus fruit.
Experts had warned that the EU move to restrict vodka ingredients could have led to a trade war.
"It would have been a WTO (World Trade Organization) problem - for which reason I don't think the Council (of EU Ministers) could ever have adopted it. A lot of vodkas from the United States, Brazil and other countries are made from other materials, and those countries would almost certainly have complained," said Chris Scott-Wilson, a spokesman for the European Vodka Alliance, which was campaigning to keep a wider definition.