Europol is the EU's law enforcement agency, assisting national authorities by exchanging information, intelligence analyses and threats assessments.
It deals with terrorism and international crime such as cybercrime, drug smuggling and people trafficking.
The new governance rules were approved by Parliament in Strasbourg on Wednesday.
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This means Europol will soon be able to step up efforts to fight terrorism, cybercrime and other criminal offences and respond faster to threats.
The rules are also designed to aid the agency's ability to ensure cross-border cooperation between police services.
The rules, first agreed by Parliament and Council negotiators in November last year, are supposed to also ensure that the agency is fully equipped to counter the rise in cross-border crimes and terrorist threats, in particular by making it easier for it to set up specialised units to respond immediately to emerging threats.
Europol will in some cases be able to exchange information directly with private entities, such as firms or NGOs, so as to work faster.
For example, Europol's internet referral unit could contact a social network provider such as Facebook directly to ask that a web page run by ISIS be deleted, halting the spread of terrorist propaganda faster.
To avoid information gaps in the fight against organised crime and terrorism, the new rules make it the duty of EU member states to provide Europol with the data it needs.
To encourage information sharing, Europol is to report annually to Parliament, Council, the Commission and national parliaments on the information provided by individual member states.
MEPs say they have ensured that Europol's new powers will go hand in hand with stronger data protection safeguards and parliamentary scrutiny.
The European Data Protection Supervisor (EDPS) will monitor Europol's work and there will be a clear complaints procedure for citizens under EU law.
Europol's work will also be overseen by a joint parliamentary scrutiny group, with members from both national parliaments and the European Parliament.
The new rules were welcomed by Greens/EFA Vice-Chair Josep-Maria Terricabras.
The Spanish member said, "The tragic terrorist attacks in Brussels and Paris have starkly highlighted the need for better cooperation between police and security forces in Europe. To that end, the new rules approved today are welcome as they include provisions to better facilitate cross-border cooperation between law enforcement forces and improve the exchange of information.
"As terrorism and organised crime does not respect international borders, it is essential to also ensure cooperation with authorities outside the EU and other international organisations.
"The more Europol develops investigative capacities, the more legal guarantees and parliamentary scrutiny are needed to prevent unlawful mass surveillance of citizens or indiscriminate exchange and analysis of personal data that could be disproportionate, unnecessary and contrary to fundamental rights.
"The text includes satisfactory provisions to this end, according to the recently approved reform of EU data protection rules. While we would have preferred stronger provisions to this end, these rules are a positive step towards improved cooperation between police and security services in Europe.”
Further comment came from Spanish EPP group member Agustín Díaz de Mera, who said, "The new rules for Europol are a powerful legislative tool that will help to enhance security for European citizens.”
Europol, which has 1,000 staff members, has its headquarters in The Hague in the Netherlands.
Its British director Rob Wainwright welcomed the decision at Parliament's plenary, saying, "Europol welcomes the final adoption of the new regulation and thanks the Parliament, Council and Commission for placing their trust in a reformed and stronger Europol.
"The new powers will improve Europol's ability to support member states in the fight against terrorism and organised crime at a time when Europe faces many challenging security threats."