The Voluntary Assisted Dying bill has passed the Victorian Upper House 22 votes to 18, after 24 hours of heated debate.
The bill has been thoroughly debated and widely amended since it was introduced by the Labor government.
The outcome follows a second night-long sitting of the legislative council and amendments must now be approved by the Lower House but are not expected to be opposed.
"This is a momentous day in the parliament of Victoria," Labor MP Gavin Jennings told the legislative council after the narrow vote.
If successful in the Lower House, Victoria will become the first state to legalise assisted dying for people with a terminal illness.
The scheme will be restricted to residents of Victoria who have lived there for at least one year.
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