The Beijing Municipal People's Congress voted in favour of the regulation, the first of its kind for the city, replacing a guideline issued in 2000, official media reported.
The regulation says Beijing will limit and gradually reduce the total discharge of major air pollutants by setting yearly quotas for district and county governments and individual polluters, cutting coal burning and limiting vehicle emissions.
It is the first time that Beijing has set a ceiling on its total emission of major pollutants, Fang Li, vice head of the Beijing Municipal Environmental Protection Bureau told state-run Xinhua news agency.
Beijing, which surrounded by heavy industrial units using mostly coal, will slap heftier fines on polluters violating the law, according to the regulation which also stresses criminal punishments for those whose acts constitute crimes.
Frequent bouts of severe smog have been a major source of public complaints in Beijing.
The metropolis reported 58 days of serious pollution last year, and the average PM2.5 index, which measures hazardous fine particles, more than doubled the new national standard of 35 micrograms per cubic metre.