The Uttar Pradesh Lokayukta and Up-Lokayukta (Amendment) Bill, 2015, also seeks to make the panel a four-member body of Chief Minister, Leader of the Opposition, Speaker and a retired judge.
The retired judge, who would be the fourth member, would be selected in consultation with Chief Minister and Speaker.
The legislation was introduced on the last day of the monsoon session of the state legislature against the backdrop of the tussle between the Governor and the Chief Minister on the appointment of justice (retd) Ravindra Singh as Lokayukta, with the file recommending his name moving back and forth five times.
The bill, moved by Parliamentary Affairs Minister Azam Khan, was passed by voice vote amid walkout by BSP, BJP and Congress members.
The legislation will now go to the Upper House, where the ruling party does not enjoy majority.