After protracted talks that concluded early on Thursday, it was agreed that the EU budget for next year will be €157.9bn in commitments and €134.5bn in payment credits.
The deal will come as a major disappointment to many, after Parliament had asked for total commitments to be increased to €162.42bn and total payments to €138.03bn.
Nearly half of the funds - €74.9bn in commitments - are designed to stimulate growth, employment and competitiveness.
Some €21.3bn will go to programmes like Horizon 2020, Erasmus+, COSME and Connecting Europe Facility (CEF) and €2.7bn to the European Fund for Strategic Investments (EFSI).
Support to European farmers amounts to €42.6bn while nearly €6bn is earmarked to reinforce the protection of Europe's external borders and address the migration and refugee crisis.
The final figure was defended by the Commission, which said it means the EU will spend more money on making Europe "more competitive and more secure."
A Commission spokesperson said, "Likewise, more money will go to support for the reception and integration of refugees and to address the root causes of migration in the countries of origin and transit."
Commission Vice-President Kristalina Georgieva, the official in charge of budget and human resources, said: "We have left no stone unturned to secure the money for a budget that will work in the best interest of our people.
"The 2017 EU budget will help buffer against shocks, providing a boost to our economy and helping to deal with issues like the refugee crisis. We continue to focus our budget on results, ensuring that every euro from the EU budget will make a difference."
Further comment came from Ivan Lesay, state secretary for finance of Slovakia, current holder of the EU Council presidency, who said, "The strength of the 2017 EU budget lies in its focus on priority measures such as addressing migration, including by tackling its root causes, and encouraging investment as a way to help stimulate growth and create jobs."
He added, "This maximises the budget's impact to the benefit of EU taxpayers, European citizens and companies. And it respects member states' continued efforts to consolidate their public finance."
To seal the compromise reached in the budgetary talks, Parliament and Council both have to formally approve the text. This is expected to be formally adopted by the Council on 29 November and Parliament on 1 December.