"After the United Kingdom leaves the union, no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom," the guidelines released by EU president Donald Tusk say.
The tiny British overseas territory on Spain's southern tip has long been the subject of an acrimonious sovereignty row between London and Madrid, which wants Gibraltar back after it was ceded to Britain in 1713.
Spain has proposed that Gibraltar be allowed to remain in the EU in exchange for shared sovereignty with Britain over the Rock.
But residents overwhelmingly voted to remain with Britain in two sovereignty referendums in 1967 and 2002 and Britaisn has repeatedly reassured the Rock that its status was non-negotiable.
The leaders of the remaining 27 EU countries -- including Spain but excluding Britain -- are set to adopt the guidelines at a summit on April 29th.
British Prime Minister Theresa May formally triggered the two-year Brexit process on Wednesday with a letter to the EU that failed to mention Gibraltar.
Gibraltarians overwhelmingly (95 percent) voted 'remain' in the referendum last year and it's government has repeatedly expressed alarm at what may occur with Brexit.
The day after the Brexit vote, Spain's former foreign minister José Manuel García Margallo boasted that the result meant "the Spanish flag will fly over Gibraltar sooner than (Chief Minister) Fabian Picardo thinks".
British Conservative MEP Ashley Fox, who represents the South West of England & Gibraltar said he would table an amendment to the guidelines.
Baroness Evans of Bowes Park, the Leader of the House and the Lord Privy Seal, insisted on Thursday that Gibraltar would form part of Brexit negotiations.
“I understand that the reason why Gibraltar was not mentioned in the letter is that it is not part of the UK for the purposes of EU law," she told the House of Lords in answer to a question from a Labour peer.
“However, we are very clear that Gibraltar will of course be covered in our exit negotiations and will be fully involved.”