The Commission will now send a questionnaire to Bosnia seeking thousands of answers about its suitability to join the EU, including its economy, the state of democracy, the rule of law and human rights.
The Council of the European Union has invited the European Commission to provide an assessment of the application of Bosnia-Herzegovina for EU membership.
The Council said the future of the Western Balkans lies in the EU, further paving the way of Bosnia-Herzegovina's EU membership. Sarajevo presented Bosnia-Herzegovina's application for EU membership on 15 February.
"When preparing its opinion on the membership application of Bosnia and Herzegovina, the Council asks the Commission to pay particular attention to the implementation of the Sejdić-Finci ruling," said the adopted conclusion.
Sejdić-Finci ruling is a court case in response to the Dayton Agreement that ended the three-year war in Bosnia in 1995.
The Dayton Agreement hadn't given the right to be elected head of state to ethnic groups other than Bosniaks, Croats and Serbs. Upon this, Roma activist Dervo Sejdić and Jewish representative Jakob Finci moved the case to the European Court of Human Rights in 2006.
The court approved the Sejdić and Finci case in 2009.
Tuesday's decision by the Council means the Commission will examine whether Bosnia-Herzegovina meets the requirements to become a member and establish whether the country has earned candidate status.
The process could take a year, according to EU officials.
A senior Slovak foreign ministry official, Ivan Korcok, said the decision marked "a good day" for Bosnia. "We are showing that the enlargement strategy and approach to the aspiring countries works," Korcok said.
The Commission will now send a questionnaire to Sarajevo seeking thousands of answers about its suitability to join.
It will assess the country's economy, the state of democracy, the rule of law and human rights, and its ability to respect the obligations of membership.
The decision came amid concerns of ethnic and political divisions in the country over a referendum organised in the Bosnian Serb entity Republika Srpska.
The Republika Srpska is one of Bosnia and Herzegovina's two entities. The federation of Bosnia and Herzegovina, which is mainly populated by Bosniaks and Croats, is the other entity.
The referendum will decide whether Bosnian Serbs can continue celebrating its "statehood day" on January 9, marking the day of Republika Srpska's inception in 1992, just prior to the outbreak of the war in Bosnia-Herzegovina.
Bosniaks and Croats have criticised the referendum, both saying it will ignite the ethnic division in the country.