"Air pollution is currently the most important environmental risk to human health," the European Environment Agency (EEA), the EU's health agency, said in the report.
The report's author, EEA air quality expert Alberto González Ortiz, said that while the level of dangerous particles in European cities was dropping, it was not dropping fast enough.
"We have not yet reached the EU standards and of course we are far from reaching the WHO (World Health Organization) standards," Ortiz said, Reuters reported.
EU law currently requires countries to assess the level, notably in urban areas, of a range of pollutants, including ozone and particulate matter, and take action if certain limits are hit.
Particle pollution in cities has become the target of tougher restrictions after the EU's top court ruled in June that cities needed to act if pollution levels were exceeded in a single black spot rather than based on an average across a region.
In July, the European Commission, the EU's executive body, asked the EU's Court of Justice to take action against Spain and Bulgaria over their poor air quality, warning the countries were failing to protect citizens against pollution.
EU limits are set per pollutant and in 2017, 16 out of the EU's 28 member states reported at least one case of levels of nitrogen dioxide, a poisonous gas in car exhaust, being higher than the legal EU annual mean concentration. This list includes France, Belgium, the Netherlands, Spain, Germany and Britain.
Some stations in London, for example, reported levels of more than 50 micrograms of nitrogen dioxide per cubic meter of air, compared with the legal EU annual mean concentration of 40 micrograms.
On Tuesday, the British government proposed a new environment bill that includes legally binding targets to reduce fine particles in the air and forcing vehicle manufacturers to recall cars that do not meet particle emission standards.
Reducing the number of cars is an important factor in reducing air pollution in cities, especially of nitrogen dioxide, Ortiz said.
"When we fight pollution, we also fight climate change as well as noise and promote more healthy behavior. It's a win-win," he added.