The money will be spent in the course of this year mostly on food, income generation, primary education, vocational training, and psychological assistance for victims of trauma.
Commission spokesman Amadeu Altafaj told RFE/RL the aid is part of the EU's regular annual contributions of humanitarian aid to Russia's war-torn republic.
"It's important to provide this support regularly, because at this stage there are still about 200,000 people who are refugees or displaced people in their home country," Altafaj said. "It is a huge proportion of the population that depends largely on international aid."
The commission says the money will also be used to support Chechen refugees in nearby regions. There are a reported 25,000 Chechen refugees still in Ingushetia, 9,000 in Daghestan, and 5,000 in Azerbaijan.
Altafaj says the European Commission uses every opportunity to "throw light on the plight of the Chechens and the persistence of a severe humanitarian crisis."
He also said that the European Union is "one of the largest contributors [of aid to Chechnya], through nongovernmental organizations, through the Red Cross, and through several UN agencies."
RFE/RL's complete coverage of Russia's war-torn Republic of Chechnya.
An annotated timeline
of the Chechnya conflict.