Some EU states have said they would agree to wrap up negotiations if the European Commission judged the Adriatic Sea state has met its targets, but Croatia still has to convince all 27 EU governments it is ready to join the bloc, and particularly that its efforts to combat corruption have gone far enough.
"The European Commission has just proposed … to close the last four chapters in the accession negotiations with Croatia," EC president Jose Manuel Barroso said. "This paves the way for Croatia to join the EU as the 28th member state as of July 1, 2013."
Since launching EU accession talks in 2005, the country of 4.4 million people has had to make fundamental reforms, overhauling its Communist-era administration and laws.
As with other former Yugoslav republics, modernisation was delayed by years of ethnic strife in the region in the 1990s.
Zagreb's bid to join the bloc also ran into trouble earlier this year, when the EC issued a scathing report on its judicial reforms, but EU officials now say a last-minute dash to implement new laws was convincing.
"Croatia had to prove that it had taken irreversible action," the EU's enlargement chief, Stefan Fuele, said.
Croat president Ivo Josipovic said anti-fraud reforms would continue after accession, to quell concerns that Zagreb could reverse its efforts in coming years.