The agreement will also provide the government in Bissau with much-needed funds and should give the two countries more control over the sustainability of their fish stocks.
Souleymane Ndene Ndiaye, the Senegalese fisheries minister, welcomed the deal.
"Fishing is a vital sector which for years, in Senegal as in other countries, has been worrying as we see our stocks being depleted," he said.
"We've agreed together ... to hold a meeting of our heads of state so that we can form a common base for negotiations and stand up to the European Union bloc."
Countries along West Africa's coast sign fishing deals with the EU every few years allowing hundreds of vessels into their waters, many of them able to process fish at sea before taking it off to consumers back in Europe.
Local fishermen using canoe-style boats and simple nets and mostly operating close to the coastline, are unable to compete with the sophisticated vessels.
Locals complain that the foreign trawlers do not respect their regulated zones, coming too close to the shore and effectively stealing their livelihoods.
Senegal, like other countries, is already suffering from high prices for other foodstuffs including rice, maize, manioc (cassava) and cereals, driven by poor harvests, record fuel prices and tight global supply.
Ndiaye said other forms of co-operation would also be included in the deal, such as maritime security.