The Victorian Parliament on Wednesday passed the "voluntary assisted dying" laws, making the state the first in Australia to allow euthanasia. It will come into force in 2019.
After more than 100 hours of tense debate, the bill was passed, Xinhua news agency reported.
Once it receives the Royal Assent - considered a procedural formality - it will become law.
Under the new laws, patients with a terminal illness will be able to request a lethal drug to end their lives beginning in mid-2019.
The law has been described as one of the most conservative among its kind in the world with patients required to submit three requests in 10 days ratified by two doctors before they are granted access to the medication.
Premier Daniel Andrews, who came to support euthanasia following the death of his father in 2016, praised colleagues, particularly Health Minister Jill Hennessy, for their work on the bill.
"Victoria is the first state to pass voluntary assisted dying laws in Australia, giving Victorians with a terminal illness the compassion and dignity they deserve at the end of their lives," he told reporters in Melbourne.
There will be a time-frame for eligible patients to access the scheme.
The patient will have to have lived in Victoria for at least 12 months before accessing the medication.
Anyone with a mental illness must be psychiatrically assessed before being allowed to end their life.
"After two and a half years of hard work...the Bill will finally give Victorians more control, compassion and support at the end of their lives," Hennessy said in a media release on Wednesday.
The Bill also creates a series of criminal offences to protect vulnerable people from abuse and coercion.
It also establishes a special board to review every request for medically-assisted suicide.
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