The legislation, which has sparked fierce reactions by opposition parties and trade unions, passed with the 153 votes in favor of all MPs of the two-partite ruling coalition, while 128 lawmakers voted against.
A total of 281 legislators participated in the roll call vote held Thursday night and 19 were absent.
The bill introduces a fresh round of austerity measures proposed by the Greek government in a bid to close the pending bailout review and secure further aid by international lenders.
During a speech before the plenary shortly before the vote, Prime Minister Alexis Tsipras said that Greece will exit the memorandum programs in 2018.
"The review closes and after seven years we head towards a comprehensive agreement, to lead Greece out of the memorandum programs. We have finally reached a positive agenda both for the country and the society," said Tsipras.
The vote in parliament followed a long string of protests organized by umbrella trade unions of public and private sector employees, and other professionals outside the parliament building in Athens and major cities nationwide.
The demonstration ended in riots between hooded youth and anti-riot police on Syntagma square in front of the parliament building.
A person who had an ax and a hammer in his possession was arrested. No severe injuries were reported.
The Left-led government defends the new package of tax hikes, pension cuts and reforms as a necessary step to ensure more help by creditors and start talks on debt relief to move forward, exit the crisis and restore growth.
Cabinet ministers have underlined that by 2021, the new austerity wave of 4.9 billion euros (5.4 billion US dollars) total worth will be counterbalanced by parallel relief measures.
Addressing the parliament on Thursday evening, main opposition New Democracy party leader Kyriakos Mitsotakis accused the government of transforming the country into a colony of austerity with no end.
"Greece is living a nightmare which is the result of Mr. Tsipras' and Mr. Kammenos' (Defense minister and the leader of Independer Greeks) decisions. Greece would have been a normal Eurozone country today, if its path had not been interrupted," said Mitsotakis.
On his part, Tsipras responded to Mitsotakis by saying that Mitsotakis supported the views of "the most extreme circles" during the negotiations between the government and Greece's lenders.
In the upcoming meeting of Eurozone finance ministers, Athens expects that the second review of Greece's third bailout in seven years will close and the path to debt relief will open.
The ratification of the bill also opened the road for Greece to participate in the European Central Bank's (ECB) quantitative easing program this summer and tap the capital markets for first time since 2014, Greek banking sources said.
