The agreement, which will see up to 34 separate pieces of information handed over from next year, is part of the security crackdown in the US fight against terrorism.
However, civil rights groups, including Statewatch, says the move means global surveillance of all passengers is now a reality and that it is illegal.
Negotiations have been underway for months between the European Commission and the US Department of Homeland Security on exactly what data can be transferred and what use can be made of it. Commissioner Frits Bolkestein said they had won major concessions from the Americans.
When a person is booking a flight from any EU country to the US, the airline will now submit
up to 34 different pieces of information as part of the passenger name record PNR agreement. This will include name and address, telephone numbers, credit cards, email addresses, number of bags , where they are travelling from and how many people they are travelling with.
The US wanted to retain the information and share it with other agencies and organisations.
The agreement reached excludes information such as medical history, food preference that may give a clue to a person's religion or ethnic group on the ground that it would break the EU's privacy laws, said Mr Bolkestein.
The agreement says customs officials cannot share the information with other law enforcement agencies However, Tony Bunyan of Statewatch said: "This deal heralds the beginning of an EU-USA axis to impose the exchange of passenger-data globally.
"This will be the first step to vetting all passengers before they board a plane, boat or cross-border train denying boarding to those considered an immigration or security risk."
A spokesperson for the Department of Justice said they expected to comply with the agreement.