The eurozone fell into deflation in December, as prices dropped 0.2% compared to the same month in 2013.
With prices slowing, the European Central Bank is more likely to act to stimulate the bloc's economy.
The fall in overall prices has been driven largely by the slowdown in energy prices, which fell by 6.3% in December compared to the previous year.
Crude oil prices have fallen dramatically since the summer of 2014, losing more than half of their value.
If energy was discounted, inflation would have been 0.6% in the month of December.
Meanwhile, unemployment across the bloc remained at 11.5% in December. An improving job market in Germany was offset by record unemployment figures in Italy, where 13.4% of the population is unable to find work.