The rise of 131,000 new cases was driven by a nine-percent increase in the Eastern Europe and Central Asia region which accounted for 102,000 new infections -- around three-quarters of them in the Russian Federation alone.
In the European Union and Iceland, Liechtenstein and Norway, new infections rose by less than one percent to 29,000, according to the joint report by the EU agency and the World Health Organisation (WHO).
Almost half of the new cases were detected at an advanced stage of the infection which raises the risk of transmission to others.
Among the reasons for the increase is the lack of awareness of anti-retroviral treatments.
"We know that providing antiretroviral therapy earlier will allow people with HIV to live longer and healthier lives, and will reduce the risk that they transmit HIV to others," WHO regional director for Europe, Zsuzsanna Jakab said.
AIDS cases were down by 48 percent in Western Europe between 2006 and 2012, while in Eastern Europe and Central Asia, the number of newly diagnosed cases of the disease caused by HIV increased by 113 percent.
According to the report, only one in three people in need of anti-retroviral therapy was receiving in last year, despite improved figures compared to 2011.
In 2011 there were 2,300,000 people living with HIV in Europe and Central Asia, according to the WHO