The proposal would see the live sheep trade come to an end in Australia in May 2028, with affected farmers in Western Australia to receive a $107 million package as part of transition efforts.
The laws have attracted scrutiny, with the Coalition pledging to reinstate the industry should it win the next election.
The opposition had accused the government of racing through the proposal without consultation.
The live export ban passed the House of Representatives 89 votes to 54 on Wednesday, June 26.
Labor had pledged to end the trade following animal rights concern after thousands of sheep died of heat stress while en route to the Middle East.
Federal Infrastructure Minister Catherine King said the concerns expressed by the industry were reasonable but the ban needed to be in place.
"This is an issue where passions do run high, and that is understandable, given we are talking about, whilst it's declining, the livelihoods of many of our regional farmers," she told parliament.
"If this bill is not passed, uncertainty will continue for sheep producers, sheep supply chain businesses and large sheep by sea exporters.
"We need to ensure that those affected by this phase out have the opportunity to be well positioned, resilient and ready when the trade ends."
Nationals Leader David Littleproud said the ban was a "senseless destruction".
"It is senseless to remove ourselves from the market, because the Middle East will simply find other markets which don’t have our high animal welfare standards,” he said.
“Agriculture Minister Murray Watt is still unable to explain the science behind closing the industry and destroying the livelihoods of more than 3000 people."
Australian Livestock Exporters' Council chief executive Mark Harvey-Sutton also criticised the move, saying the bill was rushed through parliament.
"This move is a slap in the face to Australian farmers and ignores the needs of our growing overseas markets,” he said.
“The ridiculous speed and lack of transparency demonstrated by the government is an outrage.
“It is a process that should make any Australian who works in an industry pursued by activists, unfortunately need to look over their shoulder."
But West Australian Labor MP Josh Wilson said the laws would allow the transition for affected farmers to take place in the best possible way.
"For too long, sheep producers have made the best of a volatile and dying trade,“ he said.
“Now it's time to move forward. It's time to make a sensible and well managed change to a stronger and more sustainable future."
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