The central bank also cut its deposit rate from 0.25% to zero – reflecting weak economic data in the region.
It comes on the same day the Bank of England pumped an extra £50bn into the UK economy through quantitative easing and the Bank of China slicing its key interest rate as well.
The ECB hopes bringing the deposit rate down to zero will boost lending between commercial banks which are currently paying 0.3% interest overnight.
ECB president Mario Draghi said the eurozone unlikely to grow in the second quarter but should recover towards the end of the year.
The interest rate cut is the third since Draghi became ECB president late last year.
