The US Senate has passed the bill to suspend the country's debt limit through January 1, 2025, averting a catastrophic default.
Late Thursday night, the bill was passed in a 63-36 vote, a day after the 149 Republicans and 165 Democrats in the House of Representatives voted for the legislation, reports CNN.
The bill will now be sent to President Joe Biden to be signed into law.
The President plans to address the nation on Friday at 7 p.m.
The debt ceiling is a spending limit set by US Congress which determines how much money the government can borrow. Failure to raise it beyond the current cap of roughly $31.4 trillion by June could result in the US defaulting on its debt.
A default would limit the government's ability to borrow more money or pay all of its bills and also threaten to wreak havoc overseas, affecting prices and mortgage rates in other countries.
In Thursday night's session, the bill passed with support from 44 Democrats and 17 Republicans, plus two independents, the BBC reported.
Sixty votes were required to approve the measure in a 100-seat chamber that Democrats only narrowly control.
Thirty-one Republicans were opposed, including a member of the party's leadership in the chamber, John Barrasso.
Among the four Democrats who voted against were left-wing senators Bernie Sanders, John Fetterman and Elizabeth Warren.
Senators first proposed 11 amendments to the debt ceiling bill, but they were all rejected in quick order, paving the way for a final vote.
If a single one of the amendments had passed, the whole bill would have had to be sent back to the House, leaving little time to ensure final passage of the measure before the US fell off a fiscal cliff.
"America can breathe a sigh of relief, a sigh of relief because in this process we are avoiding default," Democratic Majority leader Chuck Schumer told the Senate.
"We prevented a catastrophic default that would have decimated our economy and inflected immense pain on families. We preserved the lion's share of the historic investments we made. We took off the table the worst parts of the MAGA Republican plan that would have hurt families," he said in a tweet.
"We won't be defaulting, and we won't be passing their extreme agenda. Welcome news for our economy and for families."
In a rare display of bipartisanship, Senate Republican leader Mitch McConnell said "ending the era of the omnibus and getting Washington back to work".
Also taking to Twitter, President Biden said: "Just now, Senators from both parties voted to protect our hard-earned economic progress and prevent a first-ever default.
"No one gets everything they want in a negotiation, but make no mistake: this bipartisan agreement is a big win for our economy and the American people.
"Our work is far from finished, but I look forward to signing this bill into law as soon as possible and addressing the American people directly tomorrow (Friday)."
Suspending the debt limit through 2025 takes the threat of default off table until after the presidential election, CNN reported.
In addition to addressing the debt limit, the bill caps non-defence spending, expands work requirements for some food stamp recipients and claws back some Covid-19 relief funds, among other policy provisions.
The bipartisan debt limit deal struck between the White House and House Republicans was announced over the weekend.