The Iraqi parliament has approved a crucial election law ahead of national polls due in January 2010, BBC reported.
The reform was passed by a wide margin after weeks of deadlock, which had raised fears that the parliamentary election might have to be delayed.
There have been concerns that such a postponement could undo recent progress towards greater stability.
The poll is seen as crucial to stability and could impact on the US plan for a pullout, correspondents say.
The electoral law - which has to be in place at least 90 days before voting - was approved by 141 of 196 lawmakers present.
The emotional session was broadcast live on national television.
The BBC's Jim Muir, in Iraq, says the US will breathe a sign of relief following the vote, which had been delayed 10 times over several weeks.
Iraqi factions were deadlocked on a range of issues - including how candidates are to be listed on ballot papers and the distribution of seats in the ethnically divided, oil-rich city of Kirkuk.
The UN had warned it could not guarantee to endorse the poll if the bill had not been passed.
There have been a number of deadly attacks across Iraq in recent weeks.
Correspondents say violence may intensify as militant groups attempt to destabilise Iraq in the run-up to the election.