The EU and Japan announced Friday that they have finalised terms for a giant free trade deal which has been presented as a challenge to the protectionism championed by US President Donald Trump.

The trade deal, which the European Union says is its biggest ever, must still be signed and ratified by both sides who first agreed to its broad outlines in July.

"We welcome the finalisation of the negotiations of the Economic Partnership Agreement between the European Union and Japan," European Commission chief Jean Claude Juncker and Japanese Prime Minister Shinzo Abe said in a joint statement released in Brussels.

With the deal, the EU is seeking access to one of the world's richest markets, while Japan hopes to jump-start an economy that has struggled to find solid growth for more than a decade.

Japan is also hoping to seize an opportunity after the failure of the 12-nation Trans-Pacific Partnership (TPP), which was torpedoed by Trump in January.