In network congestion scenarios, a non-ECN compliant router indicates the congestion by dropping the packets after when interface queue threshold limit is reached. ECN allows routers to avoid dropping packets for indicating congestion and instead mark them with a code point to notify congestion. This improves the overall user experience, specially in multimedia traffic flows.
ECN implementation uses the 2 reserved bits of TOS (IPv4) or Traffic Class (IPv6) to mark ECN code points at sender and to process them at receiver. An ECN enabled sender marks IP packet header with ECT0 or ECT1 code points to show that it supports ECN. A network which is facing congestion, can prefer to mark these packets with CE code point instead of dropping them while in transit. When an ECN enabled receiver gets these CE marked packets, it may invoke techniques to reduce the traffic, additionally it gives feedback to sender informing about network congestion, which in turn reduces its traffic flow rate.
For complete details, following RFCs may also help: