In a move which was largely a formality, Bundesrat MPs who represent Germany's 16 states approved the bill with no formal ballot, a day after it overwhelmingly won the backing of parliament's lower house.
During Friday's debate in a Bundesrat extraordinary session, Finance Minister Wolfgang Schäuble again stressed the urgent need to protect the eurozone.
"Our concern is that the situation on the financial markets which remains worrying could lead to a crisis in the financial and banking sector with a big danger of contagion," he said.
The vote before the Bundestag on expanding the €440 billion ($599 billion) bailout fund had also been seen as a crucial test of Chancellor Angela Merkel's authority amid fears of a major backbench rebellion.
However, she secured an overwhelming majority of her own deputies to back the move.
Austria became the 14th eurozone state Friday to approve the new powers for the European Financial Stability Facility.