The measure would spare eight men on the state's death row, including Jesse Timmendequas, a sex offender convicted of murdering 7-year-old Megan Kanka in 1994.
That case sparked Megan's Law, which requires law enforcement agencies to notify the public about convicted sex offenders living in their communities.
Marilyn Flax, whose husband Irving was kidnapped and murdered in 1989 by death row inmate John Martini, said she seethes at the thought Martini will remain alive "while my innocent, loving, adoring husband lies in a grave".
"I feel the system has spit on me, has slapped me and I am fuming," Flax said.
Republicans said that is why they opposed the bill.
'Victory for murderers'
Richard Merkt, a state assemblyman, said the bill was "a victory for murderers and rapists".
"It does not benefit families. It does not benefit New Jersey society. It does not benefit justice," he said.
Senate Republicans had sought to retain the death penalty for those who murder law enforcement officials, rape and murder children, and terrorists, but the senate, also controlled by Democrats, rejected the idea.
|The US Supreme Court is deciding whether |
lethal injection is cruel punishment [Reuters]
Although New Jersey reinstated the death penalty in 1982, six years after the US Supreme Court allowed states to resume executions, no one has been executed there since 1963.
It had been blocked from executing anyone under a 2004 court ruling that the state had to revise procedures on how the penalty would be imposed. It never did.
The last states to eliminate the death penalty were Iowa and West Virginia in 1965, according to the National Coalition to Abolish the Death Penalty.
The US has executed 1,099 people since the US Supreme Court reauthorised the death penalty in 1976.
Other states have considered abolishing the death penalty recently, but none has advanced as far as New Jersey.
According to the Washington-based Death Penalty Information Centre, 37 states have the death penalty.
Bills to abolish the death penalty were recently approved in Colorado, Montana and New Mexico but none of those advanced.
Executions nation-wide have been on hold pending a US Supreme Court decision on whether execution through lethal injection violates the constitutional ban on cruel and unusual punishment.