The move recognises economic difficulties in the southern African country and aims to persuade President Robert Mugabe's government to hold a fair referendum on constitutional changes later this year.

"We will suspend sanctions on development aid," one EU diplomat said, speaking on condition of anonymity.

Foreign ministers meeting in Brussels will agree to allow the EU to deal directly with the Harare government on delivering aid, the diplomats said. Currently the aid has to be directed through non-governmental organisations.

The EU's executive Commission channels around 100 million euros a year ($123 million) in development assistance to Zimbabwe.

Western governments have considered easing sanctions since a power-sharing deal was agreed between Mugabe and now Prime Minister Morgan Tsvangirai, leader of the Movement for Democratic Change, following disputed 2008 elections.

Fresh elections must be held by next year, with a new constitution drawn up first. A referendum is expected to be held on such reforms.

The EU could lift asset freezes and travel bans from a number of officials, not including Mugabe and his inner circle, if the referendum is deemed credible. Currently, 112 people are affected by such measures.

"One could have a substantial lifting of (sanctions) depending on the assessment of the referendum," one EU diplomat said.

Mugabe is one of Africa's longest-serving leaders and has been accused of hanging on to power through vote-rigging. The 88-year-old has denied reports of ill health and says he is fit enough to contest the next presidential election.