A South Korean trade official said the two sides had agreed on almost all outstanding issues.
The free trade agreement has been described as an important step at a time of rising protectionism amid the world economic slowdown.
The authorities in Seoul have also announced a new stimulus budget.
The multi-billion dollar spending programme to boost the economy during the global recession, to create jobs and support businesses, will require parliamentary approval.
Ambitious
The free trade deal was described by EU negotiator Ignacio Garcia Bercero as the "most ambitious" the EU has ever negotiated with an external partner.
But it failed to reach agreement on two main contentious matters - rules of origin for products, and the refund of duties.
Final agreement would be sought at trade ministers' talks in London on 2 April, alongside the G20 summit.
"Whether we can really conclude our negotiations will be decided between our two trade ministers," said Seoul's chief negotiator Lee Hye-min.
"Until everything is agreed, nothing is agreed," Mr Lee added. Mr Bercero also warned that "success is not guaranteed".
Freer trade
Talks began in May 2007 and almost stalled on the issue of industrial tariffs, particularly on South Korean cars.
South Korea wants the provisional agreement to be seen as setting a new tone in difficult times.
"A successful free trade agreement between South Korea and the EU will send a message that the world should maintain trade liberalism and reject protectionism," Mr Lee said Monday.
He has said the deal could be initialled in late May.
The agreement aims to eliminate about 97% of tariffs on bilateral trade over the next five years.
The EU, a 27-nation bloc, was South Korea's second largest trading partner after China last year, with two-way trade worth more than $90bn (£61bn).
The EU is the largest foreign investor in South Korea, with outstanding investment reaching $43.40bn (£29.5bn) at the end of 2007.
Separately, South Korea has remained embroiled in its free trade deal-making with the US. Both countries signed an agreement in 2007 but neither legislature has ratified it.
