The final vote passed 52 to 29, with two abstentions, meaning that Bill C-45 will now head for Royal Assent later this week before it officially becomes law.
Quebec and Manitoba have already chose to ban home-grown weed, despite the fact that the federal bill specifies that individuals may grow up to four plants per dwelling. The Canadian government said it will soon announce the date of when cannabis will become legal, but warns it will remain illegal until then.
Home Secretary Sajid Javid has declared it is "time to review" the medicinal status of cannabis, but promised it is "not a first step" to legalising the drug for recreational use.
"Today, we change that".
Bill C-45, known as the Cannabis Act, creates an overarching national regulatory framework and enables each province to establish its own system of licensing and regulating marijuana businesses. "Our plan to legalise & regulate marijuana just passed the Senate", Trudeau tweeted.
The federal law fulfills a top campaign promise of Canadian Prime Minister Justin Trudeau and his Liberal Party.
Trudeau said in Parliament that the government is committed to better protecting Canada's youth and hopes to take money away from organized crime.
According to reports, the bill will allow anyone over the age of 18 to possess no more than 30 grams of marijuana.
In the neighboring U.S., nine states and the District of Columbia have legalized marijuana.
All producers of cannabis will have to be licensed by Health Canada, while provinces will oversee the distribution of the dried cannabis and oils to the retail market.
Most are expected to keep minimum ages in line with their stance on alcohol consumption - which means 19 in some places. Uruguay was previously the only country that permitted recreational marijuana in public.
Government unveiled its marijuana legislation for the province back in May, including laws around safety, sales, and possession limits for Newfoundlanders and Labradorians.
"At some level, we know that spending more than half of your waking hours intoxicated for years and years on end is not increasing the likelihood that you'll win a Pulitzer Prize or discover the cure for cancer", Jon Caulkins, a drug policy expert at Carnegie Mellon University, told Vox.
Vancouver, where the use of cannabis is legal for medicinal use, has a large number of marijuana stores, largely due to its closeness in proximity to Washington, an American state in which cannabis has been legal for a number of years.