The restrictions, which come on top of sanctions already imposed by the U.N. Security Council, are slated to be approved during a summit focused primarily on economic issues.
A draft statement said the sanctions would target dual-use items that could be used as part of a nuclear program, and Iran's oil and gas industry - including the "prohibition of new investment, technical assistance and transfers of technologies."
Iran's shipping and air cargo companies would be banned from opening in EU territory, and new visa bans and asset freezes would be imposed on Iran's Revolutionary Guard. The sanctions would also encompass trade insurance and financial transactions.
The measures would strengthen other embargoes imposed by the EU in response to past U.N. Security Council resolutions.
They would be in line with similar measures adopted by the Obama administration, which imposed penalties Wednesday against additional individuals and institutions it says are helping Iran develop its nuclear and missile programs and evade international sanctions.
British Prime Minister David Cameron said Thursday that Europe needed to play a full role in the international effort to deal with Iran's nuclear program.
This means "making sure that we have a strong package of sanctions against Iran, something that is going to be discussed today," he said. "We believe it is incredibly important."
The new EU measures would follow those adopted last week by the U.N. Security Council after Iran rebuffed a plan to suspend uranium enrichment and swap its stockpiles of low-enriched uranium for fuel rods.
If the sanctions are adopted by EU heads of government, they will be passed on to government technical experts to work out the specifics of which companies and products would be targeted, and how. This could be a tricky procedure, given the different economic interests of EU countries involved.
Officials predicted the procedure would last a month before the final list is endorsed by EU foreign ministers at their next meeting at the end of July.
The U.N. is seeking to disrupt the money flow to Iran's Revolutionary Guard. Its new sanctions call for an asset freeze on 40 additional companies and organizations involved in nuclear or ballistic missile activities.
The United States, Israel and the EU fear that Iran will continue to upgrade its uranium enrichment program until it can produce a nuclear weapon. Iran says it seeks to develop fuel only for its energy and research reactors, and that it has the right to enrich uranium under the international nonproliferation treaty.
Iran has dismissed the impact of sanctions, vowing to expand its atomic research program.
On Thursday, the country's defense minister said the new sanctions would not affect Iran's armed forces because the country is militarily self-sufficient.
"We are not seeking arms. We have the capability to export," Gen. Ahmad Vahidi was quoted as saying on the website of Iran's state TV.
Iran has been pursuing self-sufficiency in military production since 1992.
At a meeting of EU foreign ministers Monday in Luxembourg, the union's foreign policy chief, Catherine Ashton, said the door remains open for negotiations with Iran.
She said she had invited the country's top nuclear negotiator, Saeed Jalili, to discuss the issue. EU officials said Iran was expected to accept the invitation and that talks could resume later this summer. Ashton said Thursday she was still awaiting a reply.
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Associated Press writers Robert Wielaard in Brussels and Nasser Karimi in Tehran contributed to this report.
