The entire Australian mainland is now excised from the migration zone in a bid to deter the arrival of asylum seekers.
Even asylum seekers who reach the mainland can now be sent to offshore processing centres on Nauru and Papua New Guinea.
Previously, they could not be sent offshore for immigration processing.
The idea was one of 25 recommendations put forward by an expert panel on asylum seekers and introduced to the Parliament by the Government last year.
Immigration Minister Brendan O'Connor paid a special visit to the Opposition to get the measure through the Parliament as a matter of urgency on Thursday.
The ABC reports the bill was supported by the Opposition, which says it is almost identical to legislation put forward by the Howard government in 2006.
The government, which is dealing with an increasing number of boats arrivals, says it is a deterrence measure. But the Greens and refugee groups say it strips asylum seekers of legal rights.
The ABC reports amendments to allow for Human Rights Commission inspections, media access and the removal of children from the Manus Island centre, all failed to pass.
Greens Senator Sarah Hanson-Young said the bill will do nothing to stop people arriving by boat.
Several boats have arrived on the Australian mainland this year, including the embarrassing case of a boat of Sri Lankan nationals bound for New Zealand, who arrived in the West Australian port of Geraldton.
Labor Senator Matt Thistlethwaite says laws have to change to save lives, citing the Christmas Island tragedy in December 2010.
"Fifty innocent women and children drowned in shocking circumstances before the eyes of this nation on the rocks at Christmas Island," he said. "We simply cannot allow, as a nation with a heart, those circumstances to continue."