The Senate on Thursday approved the reform of the Antimafia Code with 129 votes in favour, 56 against and 30 abstentions.
As a result, the bill returns to the Lower House after many rows and much controversy.
The bill extends the confiscation of assets, long used as an effective weapon against those convicted of mafia crimes, for people convicted of bribery and corruption, stalking and terrorism offences.
A committee has also been set up to combat jihadist radicalisation.
The centrist AP group, a junior partner in the ruling coalition, gave its lawmakers freedom to vote as they deemed best, while the anti-establishment 5-Star Movement announced it was abstaining. The Northern League voted against. "I think the conditions are there to take the reform all the way," said Justice Minister Andrea Orlando.
"There are diverse opinions (regarding amendments). We will verify if the assessments have grounds. "In this case we will conduct a serene reconnaissance operation and introduce amendments if and where necessary".
Orlando went on: "This reform puts us, from the legal standpoint, in the vanguard on an international level in combatting organised crime and clearly shows the government's will to lead a battle without quarter on this front.
"I can only show great satisfaction at the approval of a measure that has had a very long gestation, which strengthens the efficiency of the agency for confiscated assets, which offers new instruments for fighting organised crime and which introduces elements of strong transparency also in the management of goods".
Italy has long used the confiscation of assets to fight the country's three main mafias: the Sicily-based Cosa Nostra, the Calabria-based 'Ndrangheta, and the Campania-based Camorra, all of which have penetrated the economies of the rest of Italy and many foreign countries as well.
Asset confiscations have, among other things, helped the police debilitate the support network of the fugitive Cosa Nostra No.1, Matteo Messina Denaro.