"The agreement reached today lays the basis for Morocco's active participation" in the 3.6 billion euros ($4.3 billion) programme, the European Commission said in a statement on Tuesday.
"It also represents a great opportunity for Galileo to become established in the western Mediterranean region," it said.
Morocco will be the fifth non-EU nation to join, though details of its participation have yet to be negotiated.
The Galileo project will comprise 27 satellites and has already elicited financial participation from China, Israel, Ukraine and India.
Discussions are under way with Argentina, Brazil, Mexico, Norway, Chile, South Korea, Malaysia, Canada and Australia.
The EU will soon allocate an initial one billion euro from its 2007-2013 budget to fund deployment and commercial operations of the Galileo satellite system.
Scope for employment
The private sector will contribute two-thirds of funds for the project, which is expected to create more than 150,000 jobs in Europe alone.
Galileo is due to go online in 2008 and will more than double the coverage provided by GPS, providing satellite navigation for everyone from motorists to sailors to mapmakers.
The EU is developing its own satellite navigation system to reduce its reliance on the American GPS system.