The laws would put in place a new plan with all basin states, except for Victoria, after the Federal Government said the old agreement was not on track to meet its water recovery targets.
The bill passed the lower house 85 votes to 50.
The original proposal aimed to return 450 gigalitres of additional water to the environment by June 2024, but the new laws would push back the deadline to December 2027.
The Murray-Darling Basin Plan outlines the amount of water that can be taken from the basin each year, while allowing for an environmentally sustainable amount to remain.
While the laws passed the House of Representatives, the Coalition and Greens have criticised the proposal, meaning its passage through the Senate is uncertain.
The Federal Government has particularly faced criticism for the proposed voluntary water buybacks as part of the scheme.
Water buybacks allow farmers to sell their water directly to the government, but have been criticised for their ability to distort water prices and drive up the operating costs of farms.
Speaking on the Bill on the day before the vote, Liberal Federal Member for Farrer Sussan Ley said “we are going to fight this hard and we are going to demonstrate how awful it is to do this to our farmers and our food producers”.
“I call this a 'dog act' by the government. It's a cowardly act,” Ms Ley said.
“It's an act of cowardice by a minister who has not looked any irrigator, farmer or community member in the eye during the course of this debate and actually said: 'This is my proposal. I'm going to lift the cap on buyback,' which is what we put in place and which prevents the act of buying water back.
“Let me make this very clear: when you recover water for the environment you can do it in two ways.
“You can simply purchase it — a very lazy way, and that's what the Labor Party did before - or you can put infrastructure, works and measures in to use what you have more efficiently; as I said, to improve the delivery of water both for agriculture and for the environment — to make it more efficient.
“I think there is $1.2 billion sitting in the government's special account to buy water, and I think that that will be exhausted fairly quickly. It won't buy 450 gigalitres, clearly. Billions and billions of dollars more will be required.
“So the bitter irony of this is that, while billions of dollars will be spent to buy water to close down huge areas of irrigated agriculture in our country, there has been some loose language from the government about compensation for those communities, which is the insult that really rocks us to the core.”
Federal Environment and Water Minister Tanya Plibersek said the new plan would allow for more money and accountability for the scheme.
"With these changes, we're opening up the full suite of water recovery options we'll be able to invest in," she told parliament on Wednesday.
"Water purchase is never the only tool in the box, it's not the first tool at hand, but it has to be one of them."
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