Senators voted 157-110 in favour of the decree, despite protests from Five Star Movement (M5S) lawmakers. The opposition argued that the measures had been drawn up by Prime Minister Matteo Renzi's financial backers, Ansa reported.
But the premier in June said the plans "will allow people to get want they want done, and free up initiatives blocked for the past 40 years."
Measures included in the new law include freeing up funds for areas hit by natural disasters.
Genoa in north-west Italy will be a key benefactor of the measure after one man died and millions of euros in damage was caused when floods hit the Ligurian port city last month.
Seven people also died in floods in the city in 2011, but the €35 million originally set aside to build protective systems was never spent due to legal wrangling and bureaucracy.
The government’s natural disaster budget will be boosted by €50 million, with Trieste, Maremma and Parma also benefitting, Ansa said.
Genoa’s metro is also set to get greater funding, as funds set aside for projects that never got started will be freed up under the new law.
The Unblock Italy decree also aims to get more Italians online, offering 50 percent discounts to companies investing in “white areas” which are currently untouched by high-speed broadband.
The benefit is also available to those investing in city internet networks, while from mid-2015 construction companies will have to make space for high-speed broadband in new buildings. Italy is currently the worst country in the EU for high-speed internet in citizens’ homes, a recent report found.
Broader plans include giving government grants for motorways only with EU approval, in addition to modernizing Italy’s train network.
High-speed train lines in southern Italy are set to half the journey time between Naples and Bari. In Sicily, a new train line is planned to serve Palermo, Messina and Catania, with Transport Minister Maurizio Lupi tasked with drawing up new infrastructure plans within six months.
The new decree should also make it easier to restore homes in Italy, while a 20 percent discount will be offered to buyers who rent properties for eight years, Ansa reported.