EIB chief President Werner Hoyer said the bank was reviewing the conclusions of a probe by the EU's anti-fraud office OLAF into whether the German automaker used the loan to make the "defeat device" in the so-called dieselgate scandal.
He added that the Luxembourg-based EIB had suspended business ties with VW and is not considering any new loans to the automaker.
"We are very disappointed at what is asserted by the OLAF investigation, namely that the EIB was misled by VW about the use of the defeat device," Hoyer said in a statement.
"We still cannot exclude that one of our loans, the €400 million ($472 million) loan 'Volkswagen Antrieb RDI,' was linked to emission control technologies developed at the time the defeat software was designed and used," Hoyer said.
Volkswagen admitted in September 2015 that it installed software devices in 11 million diesel-engine cars worldwide that reduced emissions of harmful nitrogen oxides when it detected the vehicle was undergoing tests.
"We will now review OLAF's conclusions and consider all available and appropriate action," Hoyer said, adding OLAF questioned EIB officials and consulted bank documents as part of its investigation.
Since 1990, VW's worldwide operations have received around €5 billion in loans from EIB, with €4.5 billion in Europe, EIB said.
"Their scope includes technologies targeting improved environmental performance of passenger cars, which in total accounted for about one third of the total lending to Volkswagen since 1990," EIB said.
OLAF concluded its investigation last month and sent the results to the prosecutor's office in the central German city of Brunswick and to the EIB, a spokeswoman for OLAF said.
The Brunswick prosecutor's office was unable to confirm it had received the investigation results.
Following the scandal, the European Commission, the executive of the 28-nation EU, is getting more powers to monitor testing and fine automakers.
The commission and member states have come under fire for allowing automakers to justify a long list of exceptions and loopholes when being checked for pollutants.
In the United States, where authorities first exposed the wrongdoing, VW has already committed to pay $23 billion to aggrieved customers to settle lawsuits in addition to repairing the vehicles.