To receive the funding, the banks will have to lay off thousands of workers, The New York Times reported Wednesday.
The move to rescue BFA/Bankia, NCG, Catalunya Banc and Banco de Valencia was "a milestone," said European Union antitrust commissioner Joaquin Almunia.
In prior bailouts set up by the European Union, funds have gone to governments, not private firms.
The bailout will make use of European Stability Mechanism funds and is part of a $130 billion program set up for Spanish banks.
So far, Spain continues to claim that not all of the $130 billion will be necessary to rescue its banking sector, which got into trouble as loans defaulted with global economic downturn coming on the heels of a building boom in Spain.
An audit conducted by consulting firm Oliver Wyman said Spanish banks would require $76.7 billion to return to stability.