Lawmakers voted 465 to 128, with 19 abstentions, in favour of the deal, backing an accord that is expected to double the value of trade in goods between the parties to around 100 billion euros ($135 billion) a year.
The pact aims to eliminate 98% of import duties - 1.6 billion euros of South Korean duties and 1.1 billion euros of EU duties - as well as trade barriers in manufactured goods, agricultural products and services over the next five years.
The European Union is the world's largest trading bloc, with total gross domestic product of $16 trillion. South Korea is the world's 15th largest economy, according to the International Monetary Fund.
"It is the most ambitious free-trade agreement signed by the European Union and it becomes a blueprint for future trade agreements with emergent countries, such as India," Socialist lawmaker Bernd Lange said after the vote.
The EU's trade commissioner, Karel De Gucht, was equally upbeat. "This is a landmark agreement and a benchmark for what we want to achieve with other key trading partners," he said.
South Korea welcomed the European Parliament's vote. "The government hopes that our parliament can also speedily complete the ratification process so that the agreement can take effect on 1 July as planned," South Korea's foreign ministry said in a statement.
Lawmakers also approved separate legislation that will act as a brake on surging imports from South Korea.
The so-called 'safeguard clause' was key in securing backing for the accord. It allows EU industry and governments to request a re-imposition of duties if surging imports hurt EU producers.
Concerns of EU car makers, particularly those in Italy, were at the heart of the negotiations, which started in 2007. South Korea decided to ease domestic rules on CO2 emissions for cars, benefiting large vehicles mainly imported from the EU.
Hailed as a victory for free trade by the European Union, South Korea's move has prompted concerns of a precedent that will make environmental laws vulnerable to accusations of protectionism between trading partners.
"The EU is and will be involved in free trade agreements with many countries around the world. It should be careful not to class these countries' climate legislation as a non-tariff barrier since this could expose it to similar pressures with regards to the EU's own laws," said Franziska Achterberg, policy adviser for Greenpeace.
South Korea is also negotiating a free trade pact with the United States.
(EurActiv with Reuters.)