Spain, however, immediately dismissed the offer as insufficient, warning against entering a "numbers war" after German authorities wrongly blamed Spanish cucumbers as the source of the lethal strain of E. coli.
European agriculture commissioner Dacian Ciolos urged German authorities to quickly find the real source, warning that consumers are losing confidence every day the outbreak remains a mystery.
"I will propose 150 million euros today," or $220 million, Ciolos told reporters ahead of an emergency meeting of EU farm ministers in Luxembourg.
The compensation will cover the period from the start of the crisis in late May to late June, he said, adding that the figure could change depending on the losses calculated by different European Union members.
The money will amount to between 25 and 30 percent of the losses suffered by farmers.
Spanish agriculture minister Rosa Aguilar said several nations have signed a document calling for producers to be compensated for 90 to 100 percent of the losses depending on the product.
"Spain is not the only one that will say no to 30 percent," she said.
Spain has said the crisis is costing its growers 225 million euros per week, but Aguilar said farmers are still struggling to regain consumer confidence and the government is still calculating the damage.
"It would be very bad for Spanish producers if we entered into a numbers war, which will get us nowhwere," she said, adding that Madrid wants any funds to be released immediately.
Ciolos said it was crucial for authorities in Germany, the epicentre of the crisis, to find the source of an outbreak that killed two more people, raising the death toll on Tuesday to 25.
All but one of the deaths reported since mid-May have occurred in Germany. The other fatality was a woman in Sweden who had recently returned from Germany.
Authorities are yet to identify the source of the outbreak, which has left more than 2,300 people ill at least 14 countries. German consumers are advised to avoid raw sprouts, cucumbers, tomatoes and lettuce.
"I hope that the authorities will be able to give an answer on the source of the infection as quickly as possible," he said.
"Without this answer, it will be difficult to regain the trust of consumers, which is essential for the market to regain its strength," the commissioner said.
Hopes that the source of contamination had finally been located suffered a setback Monday when initial probes carried out on a farm growing a variety of organic sprouts in the northern state of Lower Saxony proved negative.
The money proposed by the EU's executive arm is far less than the losses claimed by farmers across Europe.
Belgian agriculture minister Sabine Laruelle estimated losses for EU farmers "in the hundreds of millions of euros."
"European solidarity must rise to the occasion," Laruelle said on arrival at the meeting.
In addition to Spain, French, Dutch, Belgian and Portuguese farmers have also demanded some form of compensation.
German farmers have not been spared by the loss in consumer confidence and estimate their losses at 50 million euros.
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