The lower house passed the law by 307 votes to 116, following a weekend parliamentary session that saw the proposal adopted by the Senate in a vote that also affirmed its confidence in Renzi's administration.
The bill outlines particular benefits for low earners as well as reduced labour costs for businesses, aimed at boosting job creation in the eurozone's third-largest economy.
It also commits Italy to cutting its structural deficit by 0.3 percentage points from the 2014 forecast of 3.0 percent of GDP.
The original outline for the budget, which envisaged a 0.1 percentage point cut in the deficit, prompted objections from the European Union, which called for Rome to do more to reduce the shortfall.
According to EU rules, member states must keep their deficits below three percent or face penalties.
The European Union in November gave Italy an extra three months to fix its budget but warned it would still incur humiliating measures if it failed to curb spending.
Italy is currently trapped in a third year of recession with record unemployment standing at 13.2 percent in November, and joblessness among young people a staggering 43 percent.