The funding is specifically for the first 8km phase of Line 3, which will run entirely underground from Botevgradsko Shosse to Ovcha Kuptel and will include eight stations.
The funds will also be used to purchase new metro trains, with Siemens and Newag awarded a €140m contract to supply 20 three-car Inspiro sets as well as signalling for the line last month.
However, according to the EC, the allocation of funding for this project and others in the current financial period up to 2020, during which Bulgaria is expected to receive €5.8bn from the Regional Development Fund, is dependent on fulfilling a number of preconditions for reform by December 31.
As a result all projects must meet strict financial conditions, including more transparent criteria for tendering, clear timetables for project implementation, and the use of financial instruments to attract private capital reforms in the water sector.
"We want to make sure that the opportunities for irregularities are limited," says Commission spokesman Mr Jakub Adamovich. "If this does not happen, the money cannot be paid."