The amount of cod that Scottish fishermen can catch will be cut by 50% next year.
Quotas for 2020 were agreed at this year's annual EU fisheries negotiations, which concluded in the early hours of Wednesday morning. It was the last December Council attended by the UK before it becomes an independent coastal state.
It was agreed that cod quotas will be cut by 50% in the North Sea, while limited quotas were agreed for cod in the Celtic Sea, Irish Sea and West of Scotland - just enough to allow the landing of accidental catch.
The Scottish White Fish Producers' Association (SWFPA) said the cod quotas would make conditions "extremely challenging" for fishermen.
However, there were increases for other species, with quotas for haddock in the North Sea rising by 23% and sole in the Western Channel rising by 19%.
UK Fisheries Minister George Eustice said: "This year there has been some very challenging science for cod stocks in many parts of the North East Atlantic and we have responded to conserve stocks.
"I know that some of the quota reductions will be very difficult for some sectors of the industry and there has been considerable debate this year about the importance of by catch allowances to support the delivery of the discard ban.
"However, we also know that, to protect the profitability of fisheries in the future, we must fish sustainably today.
"Some of the problems have been exacerbated by the fact that the EU's outdated method for sharing quota between member states means that the UK gets a very small share of the cod in our own waters.
"As we leave the EU and become an independent coastal state, we will be in a position to address the unfairness that is inherent in the Common Fisheries Policy."
The agreement sets fishing opportunities for the UK while it remains part of the Common Fisheries Policy.
Once the UK has left the EU, it will become an independent coastal state and negotiate on fisheries as a third country with the EU and other coastal states such as Norway and the Faroe Islands.
Mike Park, chief executive of the SWFPA, said 2020 would be difficult for his members in light of the quotas.
He said: "Cod is an important part of the mixed fishery for my members and a reduction in what they can catch on this scale will be extremely challenging.
"Due most likely to climate change, the distribution of the species in the North Sea has changed markedly, with a pronounced northwards movement.
"It is especially disappointing that the European Commission failed to recognise the validity of the arguments made by the industry across Europe for a more gradual reduction in total allowable catch over time to aid recovery.
"In the next year, as the UK prepares to leave the Common Fisheries Policy, it is vital that the right scientific work is done to improve our understanding of the current status of the stock to enable better decisions to be taken on fishing opportunities for 2021."
Elspeth Macdonald, chief executive of the Scottish Fishermen's Federation, said: The reduction in the total allowable catch for North Sea cod next year will have a serious economic impact on the Scottish whitefish sector, presenting major practical difficulties for the fleet.
The UK delegation was led by Mr Eustice but also included Scotland's Rural Economy Secretary, Fergus Ewing, the Welsh Government's Minister for Environment, Energy and Rural Affairs, Lesley Griffiths, and representatives from Northern Ireland.