The 28 member states signed off on an agenda for talks with Switzerland aimed at bringing together more than 120 agreements on different aspects of the relationship, a European Council statement said.
Switzerland is a major trading partner with the EU and linked by many ties.
Bu its relations with the bloc were upended in February when Swiss voters approved a referendum to place restrictions on immigration.
The immediate casualty was a Swiss plan to extend its EU open border and labour arrangements to newest bloc member, Croatia.
In response, Brussels said the restrictions called into question a whole range of agreements between Switzerland and the EU based on its previous commitment to the free movement of people.
Last week, in an effort to find some middle ground, Switzerland said it would give Croatians access to its labour market, earning a grudging welcome in Brussels.
The European Council said on Tuesday it had decided to proceed with the negotiations but only "after considering the appropriateness of such a mandate in the light of the Swiss popular vote."
Accordingly, any conclusion from the talks would be "subject to a comprehensive assessment of relations between the EU and Switzerland."
Switzerland was also expected to "honour its obligations arising from the agreement on the free movement of persons and its other agreements concluded with the EU," the statement said.