If the measure had been passed three years ago, "we might have had a chance not to go through the horrible experience that we did on 11 September," said Senator Jay Rockefeller, senior Democrat on the Senate Intelligence Committee.
The bill will create a new national intelligence director to coordinate US spy agencies, establish a counterterrorism centre, set priorities for intelligence gathering and tighten borders.
After more than two weeks of delay, the Republican-controlled House planned a final vote on the package late Tuesday. The Republican-controlled Senate was expected to approve it Wednesday, sending the legislation to the White House for President George Bush's signature.
Congressional approval would be a victory for Bush, whose leadership was questioned after House Republicans refused to vote on the bill two weeks ago despite his urging.
Heavy and persistent lobbying by the bipartisan 11 September commission and families of attack victims kept the legislation alive through the summer political conventions, the election and a post-election lame duck session of Congress. Bush and Vice President Dick Cheney also pushed hard in recent days.
Bush's support was "important for the future of the president's relations with members of Congress," said Susan Collins, chairwoman of the Senate Governmental Affairs Committee and the lead Senate negotiator.
The 11 September commission, in its July report, said disharmony among the nation's 15 intelligence agencies contributed to the inability of government officials to stop the 11 September attacks on the World Trade Centre and the Pentagon.
The bill addresses the failures
that led to the WTC attacks
"We are going to create a more aggressive, a more vibrant and a more organised intelligence community that is going to give policy-makers the information that they need to make the appropriate decisions," said House Intelligence Committee Chairman Peter Hoekstra, "It's also going to give and continue to give very, very good information to our war-fighters."
The bill increases the number of full-time border patrol agents by 2,000 per year for five years and imposes new federal standards on information that driver's licences must contain.
House Republican leaders held up action on the bill for two weeks because House Armed Services chairman Duncan Hunter was concerned that the new intelligence director might insert himself into the chain of command between the president and military commanders in the field.
The legislation moved forward after Hunter and the bill's negotiators came to an agreement Monday on language clarifying the president's control.
"The president as well as his team worked with Congressman Hunter as well as all the congressional leaders on making sure that all concerns were addressed," White House spokesman Trent Duffy said.
The compromise language ensures that battlefield commanders will take orders from "the secretary of defense and above him from the president of the United States," Hunter said, and they have "every military asset under his command, including intelligence assets."