Its president, Ursula von der Leyen, who was in Lisbon to personally deliver the news to Prime Minister António Costa, said that the first transfer of funds is expected in July.
To receive funds, each country has had to specify how it will spend the money from the so-called Recovery and Resilience Facility (RRF).
The plan, which is now approved, totals €13.9bn of grants and €2.7bn of loans, and must include at least 37% of expenditure in investments and reforms that support climate objectives, and 20% towards the digital transition. These requirements are met, with 38% and 22% respectively.
On climate, Lisbon says it will invest in sustainable urban transport, including metro expansions in the capital and Porto, as well as new electric and hydrogen buses.
Forest management and fire prevention are also included in this area.
On digital, the Portuguese plan intends to invest in basic digital training for citizens, as well as modernising and digitising the country's administrative systems.
Support for businesses will also be key, with roughly €5bn to be invested in innovation and strengthening indebted companies.
The plan will see investments in healthcare projects too.