Cuba was the only Latin American country not to have a "dialogue and cooperation" deal with the 28-nation EU covering issues such as trade, human rights and migration.
But EU ministers last week dropped a policy in place since 1996 which stated that Cuba first had to improve its human rights record before getting closer links with the bloc.
Monday's accord was signed by Cuban Foreign Minister Bruno Rodriguez Parrilla, EU foreign affairs chief Federica Mogherini and representatives from the EU member states at a Brussels ceremony capping years of difficult negotiations.
Related reading
Google shakes hands on Cuba internet deal
Mogherini offered condolences on Castro's death, telling reporters it was "only natural that we are closer to Cuba as it undergoes profound change."
She said she was also "very encouraged" by dialogue with Havana on human rights and the accord would help foster Cuba's social and political modernisation.
Castro died last month after more than 50 years at the helm of a self-styled Socialist paradise reviled by the West, with Cuba gradually opening up to the world, including bitter foe Washington.
In 2003, the EU imposed sanctions on Cuba and suspended cooperation over a crackdown on journalists and activists and it took until 2008 to get talks going again.
Related reading
Killing Castro: Poisoned cigars, explosive seashells
Trump election, no impact
Rodriguez Parrilla said "we have had a few differences on the way but the removal of the (1996 EU) common position re-establishes normal relations based on mutual respect."
Asked what impact Donald Trump's election might have on US policy, he noted angrily that despite easing tensions, Washington had kept its economic embargo against Cuba.
"EU-Cuba relations do not go via Washington," he added.
Mogherini said she saw no reason for concern although Trump's shock election victory has stoked doubts in Europe about Washington's global stance and its crucial security guarantee.
"Developments in Washington will not affect in any way relations between the EU and Cuba," she said, stressing Brussels had and would continue to raise concerns about the impact of the US economic blockade on other countries.
Related reading
Rex Tillerson picked as Secretary of State
She also highlighted Europe's wider ties with the region as a whole.
"We are talking about a transatlantic link not only with the United States, but also with Cuba and Latin America."
On the campaign trail, Trump had threatened to end the thaw in US ties backed by President Barack Obama unless Havana made concessions on human rights and opened up its still largely state-run economy to private business.
"Economic links with Europe will continue to be a priority for Cuba as we build a socialist economy," Rodriguez Parrilla said at the signing ceremony.
He recalled a speech in 2003 in which Castro hailed the historical importance of the EU as a counterweight to the United States which imposed the trade embargo and other sanctions on Cuba after it sided with Moscow in the Cold War.
