It is now expected to pass to the house before it is signed into law by George Bush, the US president.
Immediately after Thursday's senate vote, Bush gave his backing to the plan, saying it was "robust, broad-based, timely, and it will be effective".
The deal means tens of millions of Americans are likely to receive tax rebates in coming months of up to $600 for individuals and $1,200 for couples, plus $300 for each child.
The US economy has been battered by the subprime mortgage scandal, contributing to fears over a possible recession in the world's largest economy and triggering weeks of turmoil on global stockmarkets.
Henry Paulson, the US treasury secretary Henry Paulson, also welcomed the senate's approval of the stimulus package, saying it would help inject money into the stressed economy.
"This package of payments to individuals and incentives for businesses to invest will support our economy as we weather the housing downturn," he said.
However analysts say it is unclear how much of a boost the plan will give to the troubled economy, with many doubting it will deliver a needed shot-in-the-arm to growth.
The plan's success depends in large part on whether Americans get out and spend their rebate checks or simply save them in their bank accounts.
The turnaround on Wednesday came after Democrats fell just one vote short of pushing their larger $205 billion plan past Republicans in the senate.
On Thursday, Democrats decided not to continue the battle and
instead send the measure to Bush.
Speaker Nancy Pelosi, the Democratic leader of the house, had called on the senate to stop infighting and pass the bill.
"There's no reason for any more delay on this,'' she said.
Reid said that there would be further bills on some of the elements that had been left out of the latest senate package.
"We all have to acknowledge that the house bill has been improved
significantly ... We'll be back and do more things to help stimulate the
economy,'' he said.