"This is a great opportunity for Europe to set an example of responsible innovation in cosmetics without any compromise on consumer safety," said Tonio Borg, the EU's top official on health and consumer issues.
Animal rights groups were quick to cheer the measure, but Cosmetics Europe, a trade body representing the EU's $93-billion industry, said the ban "acts as a brake on innovation."
Consumers are unlikely to notice immediate changes because products containing ingredients that were tested on rabbits, mice or guinea pigs before the ban can remain on the shelves.
The 27-country bloc's executive arm, the European Commission, said the decision "is in line with what many European citizens believe firmly: that the development of cosmetics does not warrant animal testing."
The EU has banned animal testing of finished cosmetic products since 2004. The ban on cosmetics containing animal-tested ingredients was first decided four years ago but initially left loopholes for certain tests following resistance from cosmetics companies.
At the moment, neither the United States nor Asian markets have similar bans in place. The Humane Society International said it hopes the course taken by the EU -- whose nations combined form the world's biggest economy -- will soon be replicated by the global cosmetics industry.
The phase-out of animal testing over the years in Europe has resulted in a dramatic drop in such activity among U.S. cosmetic and personal-care product manufacturers looking to sell overseas.
Cosmetics Europe said the new EU ban threatens competitiveness and comes too early because there is still no alternative for some specific animal tests to ensure the safety of all ingredients.