Authorities say swifter, more aggressive action could have saved more lives. The sinking, one of the country's deadliest disasters in decades, killed more than 300 people, mostly teenagers travelling to a resort island for a school trip.
The lawmakers voted 146-71 in favour of transferring the coast guard's responsibilities to the National Police Agency and establishing a broader safety agency. Thirty-two lawmakers abstained from the floor vote broadcast by a legislature-run website.
The restructuring plan will come into force once President Park Geun-hye and her Cabinet Council endorse it in a process widely considered as formality. In May, Park announced the plans to disband the coast guard, calling its rescue work a failure.
Authorities blame overloading of cargo, improper storage, untimely rescue efforts and other negligence for the disaster. Criticism of the coast guard centers on the questions of why its boat was late on the scene and why rescuers didn't enter the sinking ship to rescue trapped passengers. The coast guard has said the ship was listing too far for its officers to safely enter when they arrived.