Cabinet on Thursday decided that Cyprus officially submit its application to host a planned EU labour authority, deputy government spokesman Klelia Vassiliou said on Thursday.
The European Commission wants to set up a new EU agency to oversee cross-border labour disputes and manage the growing number of people who travel within the bloc for work.
Under the decision, the agency would receive a budget of €50 million.
The Commission sees the new office as a way to bridge gaps between fractured national labour inspection systems at a time when Brussels is churning out more and more EU-level employment legislation.
More than 17 million Europeans work in a member state that is different from their nationality. That figure has almost doubled in size over the last decade, according to Commission statistics.
Cyprus is one of the few EU member states that does not host an EU agency. Efforts in the past to bring another agency failed but the government is banking on traditional good labour relations in Cyprus and its involvement in labour issues on multi-lateral and international levels.