The EU leader made a list of sanctions targets aimed at Turkey in response to "unilateral provocations" in the eastern Mediterranean.
"Turkey launches unilateral provocative activities and escalates criticism against the European Union (EU), member countries and European leaders", according to the EU statement after the summit.
"Turkey's provocative unilateral activities in the eastern Mediterranean still take place, even within the exclusive economic zone of Cyprus," the statement said.
The sanctions would be aimed at individuals and could be imposed "if Turkey pursues its actions," an EU diplomat said.
French President Emmanuel Macron welcomed the EU "tough" with Turkey, but said that EU leaders have not agreed to impose an arms embargo or target the entire economic sector of Turkey.
European Council (EC) spokesperson said the EU leaders called for the target list of "restrictive measures".
On the eve of the EU summit, Turkish President Recep Tayyip Erdogan said the country "does not pay much attention to any EU sanctions decision".
Greece, backed by France, raised a demand for the EU to act harder than Turkey, after Ankara sent a gas exploration drilling vessel into disputed waters with Athens.
Some EU member states and the North Atlantic Treaty Organization (NATO) are more cautious.