Switzerland "will treat Croatian citizens in the same manner as it treats nationals of other EU member states," the government said in a statement.
Citizens from EU's newest member Croatia, which joined last year, will be allowed access to the wealthy Alpine nation's job market through a new quota system, starting on July 1st.
Switzerland's relations with the EU were thrown into turmoil in February when voters approved a referendum to curb immigration from the bloc.
Brussels reacted angrily, saying such curbs put in doubt a whole range of bilateral agreements between Switzerland and the EU based on commitment to the free movement of people.
The country had been on the verge of signing new agreements with the EU to expand its open border and labour market arrangements to Croatia, but put the talks on ice after the referendum.
Brussels, which in response has suspended negotiations towards Swiss participation in lucrative EU research and education programmes, did not seem impressed with the Swiss announcement on Wednesday.
European Commission spokeswoman Pia Ahrenkilde Hansen said the temporary move, which will remain in place until February 2017 at the latest, only offered a "provisional" solution.
Swiss President Didier Burkhalter acknowledged on Wednesday that Switzerland would not easily be able to return to the seemless cooperation with the EU it had enjoyed before the February vote.
"We can jump-start the engine, but it won't run as quickly as before," he said.
He stressed though that while the reboot in Swiss-EU relations was "not taking place at great speed . . . it is happening."
In a separate announcement on Wednesday, the Swiss government said a safeguard clause limiting work permits for citizens of other EU countries had expired and could not be extended.
Switzerland had applied the clause, permitted in its bilateral deal with the EU on the free movement of persons, to eight recent EU members in 2012 and extended it last year to 17 more countries.
"Citizens from the EU-8 and the EU-17 thus once again benefit from complete and total free movement, as long as they come to Switzerland to work or, if they are not working, have enough resources to support themselves," it said.
Restrictions can still be applied to citizens from the newest EU members: Romania, Bulgaria and Croatia, it said.