The EU's duty is to minimize the uncertainty and disruption caused by Brexit for European citizens, businesses and member states, President of the European Council Donald Tusk said on Friday.
Setting out the guidelines, Tusk said it was "only fair" that the United Kingdom should honor the financial promises it made as part of the 28-member bloc.
The EU 27 will adopt the guidelines at a special summit on April 29.
However, Mr Tusk also insisted that the United Kingdom would remain under the authority of the European Court of Justice and retain the free movement of people during any transitional period, a demand that will make life awkward for Theresa May with Brexiteers on her back benches.
"No one is interested in using security cooperation as a bargaining chip", Tusk said, noting that "especially" after last week's attack in Westminster, "it must be clear that terrorism and security is our common problem". "It must be a misunderstanding".
The EU has reiterated in its draft guidelines document that there needs to be early guarantee on citizens' rights and on avoiding a hard border between Northern Ireland and the Republic of Ireland.
Donald Tusk, the president of the European council, has insisted the EU will not be "punitive" in its approach to "confrontational" Brexit talks, warning that "Brexit is punitive enough".
But May is struggling to bring unity in the wake of the divisive Brexit referendum last June that saw 52 percent vote in favour of leaving the European Union and 48 percent against.
Further complicating things in the full withdrawal negotiations will be Gibraltar, the British overseas territory on the Mediterranean that Spain has wanted back since it ceded it more than three centuries ago.
Barnier has said tackling those uncertainties will be his top priority, along with ensuring Britain pays what Brussels argues it owes as a share of commitments made by the European Union but not yet funded - maybe of the order of 60 billion euros.
British Prime Minister Theresa May had in her letter triggering the two-year exit process on Wednesday called for talks on the divorce and a future deal to run in parallel as soon as negotiations start.
Tusk spoke two days after May triggered the U.K.'s exit procedures, starting two years of negotiations that will seek to disentangle a 44-year relationship.
The EU and Britain have two years to negotiate the terms of Brexit.
"Once, and only once we have achieved sufficient progress on the withdrawal, can we discuss the framework for our future relationship", Tusk told reporters in Malta - a compromise between European Union hardliners who want no trade talks until the full Brexit deal is agreed and British calls for an immediate start.
Only once "sufficient progress" has been achieved on this phase will talks move on to the future relationship.
Responding to May's warning that she might prefer to walk away without a deal, the European Union should be ready for such an outcome but will, the document says, work to ensure that does not happen as it would be in the interests of neither side.
Brexit minister David Davis also said on Thursday that May's words did not amount to a threat.
Tusk will give a press conference in Malta with Maltese Prime Minister Joseph Muscat, whose country holds the EU's rotating presidency, to discuss the strategy at 0745 GMT.
He said: "What she said was that if we don't have a deal, it's not good for either side".
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