"To allow more time for the ongoing negotiations to reach a long term solution to the Iranian nuclear issue, the Council has prolonged until 7 July 2015 the suspension of EU restrictive measures," a European Council statement said.
The move comes before a midnight (2200 GMT) deadline for a deal to end the 13-year standoff over Iran's nuclear ambitions is expected to be extended for a few days.
Iran's Foreign Minister Mohammad Javad Zarif has joined US Secretary of State John Kerry for talks in Vienna which their Russian and German counterparts, Sergei Lavrov and Frank-Walter Steinmeier, were also set to join, according to sources.
This is the third time the EU sanctions freeze has been extended.