The bill on the US-India Civilian Nuclear Agreement was adopted 85-12 by the Senate after a day of intense debate, officials said.
Under the agreement, India, a non-signatory of the nuclear Non-Proliferation Treaty (NPT), would be allowed access to long-denied civilian nuclear technology in return for placing its atomic reactors under global safeguards.
US President George W. Bush, in Asia to attend a summit of the Asia-Pacific Economic Co-operation (APEC) forum, hailed the Senate passage of the deal, saying it would bring the Asian giant into the "non-proliferation mainstream."
For its part, India cautiously welcomed the deal, saying it would await the final version of the US legislation before celebrating.
Indian Foreign Minister Pranab Mukherjee, in a statement, called for the final bill to adhere "as closely as possible" to the pact signed by Bush and Indian Prime Minister Manmohan Singh "so that full civil nuclear co-operation between India and the US becomes a reality and contributes to India's security."
Bush and Singh agreed to the deal in July last year when Singh paid a visit to Washington. They reaffirmed it during the US leader's visit to New Delhi in March.
The agreement was seen as controversial because the US Congress had to create a rare exception for India from some of the requirements of the US Atomic Energy Act, which currently prohibits nuclear sales to non-NPT signatories.
In addition, US weapons experts warned that forging such an agreement with non-NPT member India would not only make it harder to enforce rules against nuclear renegades Iran and North Korea, but also set a dangerous precedent for other countries with nuclear ambitions.
"This agreement is the most important strategic diplomatic initiative undertaken by President Bush," said Republican Senator Richard Lugar, co-author of the bill.
"By concluding this pact and the far-reaching set of co-operative agreements that accompany it, the President has embraced a long-term outlook that seeks to enhance the core strength of our foreign policy in a way that will give us new diplomatic options and improve global stability," he said.
During the debate, some Senators tried to inject controversial amendments, including a mandatory commitment by New Delhi to stop making nuclear bomb materials and to sever military links with Iran, but they were rejected by vote.
"Granting India a special exemption from international and US nuclear non-proliferation laws and guidelines sends the wrong signal at a time when the world is trying to prevent Iran from getting the bomb," Edward Markey, co-chair of the House of Representatives Taskforce on Non-proliferation, said in a statement.
The Bush administration has won a commitment from New Delhi to negotiate a so called Fissile Material Cutoff Treaty as a multilateral approach to reduce nuclear tensions and threats associated with an arms race in South Asia, US officials say.
The House of Representatives gave its thumbs-up to the nuclear deal in July, a year after Bush and Singh first agreed on it, but a Senate vote had been delayed due to legislative elections last week that resulted in Democratic control of both chambers in the new Congress from January.
The Senate approval Thursday, however, is not the final step in the process.
The Senate and the House are scheduled to meet in December to reconcile several amendments they had made and that needed to be approved again by the two chambers before Bush signs the final bill into law.
In addition, Congress will have to consider a comprehensive US-India agreement incorporating all technical elements of the deal, including a set of international nuclear safeguards that India had to adhere to.
"I am confident that we can now work closely with our colleagues in the House to get this important measure to the president as swiftly as possible," said Bill Frist, the Republican Senate majority leader.

Copyright AFP (Agence France-Presse), 2006