A majority of the US Senate voted for the measure a day after the House of Representatives passed it.
The bill is a hard-fought compromise that ended months of political wrangling over the power of the Pentagon under the post September 11 reforms.
The bill, which creates a new director of national intelligence post, then goes to President George Bush for his promised endorsement.
The House of Representatives passed the bill after lawmakers resolved differences over Pentagon authority on intelligence needed to help battlefield commanders, and Republican leaders decided to put off a fight over immigration issues until next year.
Dozens of Republicans broke ranks with Bush and voted against it because the compromise bill omitted immigration provisions they wanted.
The bill, sought by some of the families of September 11 victims, would implement key recommendations made by the 9/11 commission and create a new director of national intelligence with strong budget powers to oversee 15 US spy agencies.
It also creates a new centre that would plan and help oversee counterterrorism operations.
September 11 attacks
White House spokesman Trent Duffy said Bush monitored a broadcast of the House debate aboard Air Force One as he flew back to Washington from California.
"The president is very pleased with House passage. He knows that this bill will make America safer... He greatly looks forward to Senate passage and ultimately to signing the bill into law," Duffy said.
"The president is very pleased with House passage. He knows that this bill will make America safer... He greatly looks forward to Senate passage and ultimately to signing the bill into law"
White House spokesman
The bill is the biggest revamping of US intelligence in more than 50 years and the second major government overhaul since the September 11 attacks against the World Trade Center and Pentagon that killed almost 3000 people, more than three years ago.
Congress earlier created the Homeland Security Department that brought together various federal law enforcement agencies.
The bill stalled last month and appeared dead for the year, but found new life under pressure from families of victims of the attacks.
Last-minute appeals by Bush to House Republican holdouts helped secure a final agreement between the House and Senate over language ensuring that battlefield commanders have priority access to intelligence assets.
Passage of the legislation was all but secured when House armed services committee chairman Duncan Hunter and Senate armed services committee chairman John Warner announced their support on Monday after resolving the Pentagon authority issue.
Wrangling about the chain of command issue and a dispute over immigration provisions sought by House judiciary committee chairman James Sensenbrenner had delayed passage of the bill after House and Senate negotiators thought they had completed a deal last month.
The bill was sought by families of
September 11 victims
Sensenbrenner voted against the bill even though House leaders promised they would push next year for immigration provisions he unsuccessfully sought to include.
The bill does contain other immigration and law enforcement measures, including minimum standards for drivers licences and other identification that is needed to board aircraft.
It also would add more border patrol agents and increase the number of beds available to house illegal immigrants and "terror suspects".
The bill also increases powers to pursue "terror suspects" and calls for a national transportation security strategy.
It would also create a civil liberties oversight board to ensure privacy and civil liberty issues are considered in writing regulations and implementing the law.