The move is part of the EU's effort to cope with hundreds of thousands of refugees and unauthorized migrants who have tried to enter Europe in recent years, undermining European solidarity as countries bickered over how to manage the problem.
The EU has announced plans to bring 50,000 of the most vulnerable refugees from African countries to Europe.
The European Commission suggested that member states accept the new EU resettlement plan in order to, over the course of two years, bring to Europe at least 50,000 of the most vulnerable persons in need of global protection.
The scheme suspended European rules which say would-be refugees should apply for asylum in the country of entry to the EU - which had put the main burden of managing the crisis on frontline countries such as Italy and Greece.
"People who are in genuine need of protection should not risk their lives or depend on smugglers", said Dimitris Avramopoulos, the EU's migration commissioner. Approximately 29,000 out of the proposed 160,000 refugees were resettled in European countries under the plan.
The EU Commission is aiming to bring the refugees to Europe legally, enabling them to avoid people smugglers.
The latter scheme, which ended on Wednesday, saw just 29,000 people out of a planned 160,000 shared out around European Union states to ease the pressure on the overstretched Greek and Italian authorities.
Recovering Congressman Steve Scalise talks to CBS
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Euro slips after German election results
Dow Jones closed down by 0.23 percent, S&P 500 ended down by 0.22 percent, Nasdaq finished the day down by 0.86 percent. Benchmark 10-year notes last rose 12/32 in price to yield 2.2216 percent, from 2.262 percent late on Friday.
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Under the proposals, the European Commission has set aside €500m (£439m) to relocate refugees mostly from Libya, Egypt, Niger, Sudan, Chad and Ethiopia.
"In the case of long-lasting security threats, an extraordinary possibility for prolonging border controls and internal borders for another two years is added".
Countries in the 26-country Schengen travel area can now reintroduce frontier checks for six months for security reasons, and two years if that is combined with a threat to borders such as Europe's migration crisis.
The move is an attempt by the European Union to stem the flow of hundreds of thousands of refugees and unauthorised migrants who have tried to enter Europe over the past few years.
Avramopoulos however said this should be a "last resort", and that keeping the Schengen area open for travel should be a priority.
Germany, Austria, Denmark and Norway have reinstated border checks at certain points in response to migrant arrivals, while France has also done so, citing a persistent terrorist threat, but these controls are due to expire in coming weeks.
The reintroduction of so many checks raised concerns about the collapse of the Schengen zone, seen by many in Europe as a symbol of unity and freedom.