It is the first time the bloc has funded military support for a country under attack.
The EU says it will buy and deliver weapons to Ukraine - the first time the bloc has financed military support for a country under attack.
Von der Leyen, president of the European Commission, said plans had also been made to ban state-owned media outlets Russia Today and Sputnik from broadcasting in the EU.
"As the war in Ukraine rages on, and Ukrainians fight bravely for their country, the European Union steps up once more its support for Ukraine and the sanctions against the aggressor – Putin's Russia," said von der Leyen.
"For the first time ever, the European Union will finance the purchase and delivery of weapons and other equipment to a country that is under attack.
"This is a watershed moment."
The bloc is also proposing to ban Russian-owned, Russian registered or Russian-controlled aircraft from taking off and landing in the EU or flying over the bloc's airspace.