A total of 136 lawmakers in the 242-member upper house, controlled by the ruling Liberal Democratic Party, voted for the package, against 102 opposition votes, a parliamentary spokesman said. Four other lawmakers did not cast a vote.
The passage came after the lower house last month approved the 95.88 trillion yen (USD 937.4 billion) budget for the fiscal year starting in April.
The new budget comes as Tokyo pushes for speedy implementation of a USD 50 billion stimulus package specially designed to protect Japan's fragile economic recovery, as sales taxes rise to 8.0 per cent from 5.0 per cent on April 1 -- the first hike since the late nineties.
But there are fears it will derail Prime Minister Shinzo Abe's policy blitz, dubbed Abenomics, aimed at kickstarting the world's third-largest economy after it suffered years of growth-denting deflation.
More From This Section
"I would like to continue making strong efforts to end deflation and grow the economy," the conservative Abe told a parliamentary session today.
The premier, who swept to power in late 2012 on a ticket to rescue Japan's long-lumbering economy, is expected to hold a press briefing this evening.
The proposed package -- up from 92.61 trillion yen for the current fiscal year -- is seen as key to paying for Japan's snowballing health and social welfare costs.
Japan's projected primary balance deficit -- the shortfall between what the government takes in and what it spends, apart from debt-servicing -- is expected to shrink by 5.2 trillion yen to 18.0 trillion yen.
That means Japan's national debt, now more than twice the size of the economy, will continue to rise, but at a slower pace.
Public spending projects are part of the proposed budget as well as plans to upgrade Japan's defence forces, as China bulks up its military and fears remain over North Korea's nuclear arms potential.