The compromise legislation, which passed 84-15 yesterday with broad bipartisan support in the Senate, allocates some $552.1 billion for military spending on bases and equipment as well as troop training and resources, and allows for a one per cent raise in military salaries.
The National Defence Authorisation Act also provides $80.7 billion for overseas contingency operations, namely the 12-year-old war in Afghanistan.
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The process angered several Republican lawmakers because in the rush to pass the measure, they were not allowed to introduce or debate key amendments.
Some Republicans, including Senator Lindsey Graham, had wanted to attach an amendment imposing tough new economic sanctions on Iran.
In the aftermath, bipartisan negotiators from both the Senate and House of Representatives hashed out a compromise bill. Last week it won overwhelming approval from the House.
Obama has expressed support for the bill, and the White House reiterated its backing yesterday.
"Overall, the administration is pleased with the modifications and improvements contained in the bill that address most of the administration's significant objections with earlier versions regarding these issues," White House press secretary Jay Carney said.
The bill includes language that eases restrictions on the president's ability for transferring Guantanamo detainees overseas, a potential first step toward meeting his 2008 campaign pledge to close the controversial prison for terror suspects in Cuba.
But it retains prohibitions on transferring the detainees to the United States, a provision sought by Republicans.
One of the bill's primary authors, Senate Armed Services Committee chairman Carl Levin, hailed its passage as "a strong bipartisan statement that, despite our differences, we can come together and accomplish important business for the good of the country."
He also noted that legislation "makes progress toward the day we can close the detention camp at Guantanamo Bay."
In the Senate, women lawmakers on both sides of the aisle led a months-long effort to crack down on sexual assault within military ranks, and their persistence will result in major changes to the Uniform Code of Military Justice.
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