The EU says fleets are too big and fish stocks are threatened
The EU is to release emergency aid worth up to two billion euros (£1.6bn) to help the fishing industry cope with high fuel costs and overcapacity.
EU fisheries ministers agreed on the package late on Tuesday.
Fishermen have protested in Belgium, France, Italy, Portugal and Spain in recent months, urging help to cope with the impact of soaring diesel prices.
The EU will provide 1.4bn euros from the European Fisheries Fund plus 600m euros from the European Commission.
The EU Fisheries Commissioner, Joe Borg, has said EU member states need to build a more efficient European fleet for the future.
The emergency aid is to be used in part to cut the size of fishing fleets and the time that fishermen spend at sea.