"This is a defining moment in the history of Zionism and the state of Israel… Israel is a Jewish nation-state," Prime Minister Benjamin Netanyahu announced.
The controversial law also declared Hebrew the only official language, stripping Arabic of the same status and designating it as a "special status" language.
"Similar to a constitution, the basic laws underpin Israel's legal system and are more difficult to repeal than regular laws", The Times of Israel reported, adding that the law also declares that Jerusalem is the capital of Israel, sets the Hebrew calendar as the official calendar of the state and recognizes all Jewish holidays.
The most furious protests during the debate reportedly came from Arab lawmakers. According to the Times of Israel, Joint (Arab) List MK Jamal Zahalka ripped a printed text of the bill to shreds from the podium.
"I declare with astonishment and sorrow the death of democracy… The funeral will take place today in the plenum," his fellow party member Ahmad Tibi was quoted as saying by The Times of Israel.
Arabs make up a fifth of the country’s eight-million-strong population and have frequently accused the government of discrimination, including against Palestinian refugees, millions of whom have been trying to return to their ancestral homes after being banished during the creation of Israel.