The treaty creates an EU president and a more powerful foreign policy chief.

The document, signed at a ceremony at the city's historic Jeronimos Monastery, also scraps veto powers in many policy areas.

It is a replacement for the EU constitution, which was abandoned following French and Dutch opposition.

EU leaders insist that the two texts are in no way related. But the Lisbon treaty incorporates some of the draft constitution's key reforms, and several governments face domestic pressure over the document.

In a speech before the signing, European Commission President Jose Manuel Barroso called on European leaders to use the treaty to make freedom, prosperity and solidarity an everyday reality for all European citizens.

Portuguese Prime Minister Jose Socrates, whose country holds the rotating EU presidency, said that the treaty would create a more modern, efficient and democratic union.

The leaders signed the treaty, translated into the EU's 23 official languages, using specially engraved silver fountain pens as a choir sang Beethoven's Ode to Joy.