The scheme is hoping to offer high-speed connections to 8,000 communities
The European Parliament has voted in favour of providing free wi-fi in certain public places.
Public entities can apply for up to €20,000 in set-up costs.
The initiative is set to be rolled out at hospitals, public parks, train stations, bus terminals and libraries.
MEPs approved the agreement during the plenary session in Strasbourg.
The scheme, known as WiFi4EU, will cost around €120m between 2017 and 2019.
It will support the installation of state-of-the-art wi-fi equipment in the centres of community life.
The European Commission says it will be disbursed in a geographically balanced manner, so that high-speed connections can benefit both residents and visitors across the EU.
It is hoped to have between 6,000 to 8,000 local communities set up by 2020.
WiFi4EU will fund the equipment and installation costs (internet access points), while the beneficiary will pay for the connectivity (internet subscription) and maintenance of the equipment for three years.
The European Parliament says funds can only be used "if commercial advertising or the use of personal data for commercial purposes are excluded".
The European Parliament, Council and the Commission reached agreement on the initiative back in May.
Commission President Jean-Claude Juncker has said it will contribute to the vision of having "every European village and every city with free wireless internet access around the main centres of public life by 2020."
It was originally announced by President Juncker in his State of the Union Address in September 2016 as part of an overhaul of EU telecoms rules - including new measures to meet Europeans' growing connectivity needs and boost Europe's competitiveness.