The agreement will allow the European Medicines Agency (EMA) to use data from US Food and Drug Administration (FDA) inspections and vice versa from November.
It also means EU authorities will only visit US sites in exceptional circumstances.
According to the European Commission the agreement “facilitates the exchange of official GMPs documents” and enables “reliance on the factual findings in such documents.”
The Commission also said it will allow national competent authorities from EU Member States - which conduct inspections under EMA guidance - and the US FDA to make better use of inspection resources and avoid duplicate site visits.
It added that: "The enhanced cooperation with US regulatory authorities will improve the EU's ability to identify and address problems at factories before they become a public health risk.
"It will also reduce the administrative burdens and costs facing pharmaceutical manufacturers, including smaller producers."
The deal builds on the EU-US Mutual Recognition Agreement (MRA) signed in 1998.
The EMA told us "The EU and the US signed the Agreement on Mutual Recognition between the European Community and the United States of America in 1998. The agreement included a Pharmaceutical Annex providing reliance on each other’s good manufacturing practice (GMP) inspections.
"However, this was never fully implemented. The 2017 Amended Sectoral Annex is building on the 1998 framework. It benefits from the collaboration of the EU and the US in the past years through various pilot initiatives on GMP inspections."
The European Commission suggested a deal was close last October in a report on the 15th round of negotiations of the proposed Transatlantic Trade and Investment Partnership (TTIP).
Since then the TTIP negotiations have halted. On January 24, EU Trade Commissioner Cecilia Malmström said "the election of Donald Trump seems likely to put our EU-US negotiations firmly in the freezer at least for a while."
However, a document published a few days before Commisioner Malmstrom's speech indicated that an inspection deal had already been ageed.