The legal amendments will come in force when interim president Adly Mansour approves the government-penned draft.
The cabinet did not immediately release the changes made to the law.
Egypt has been hit by a string of bombings and shootings targeting the security forces since the army ousted Islamist president Mohamed Morsi last July.
Yesterday, a police general was killed and five policemen were wounded when three bombs exploded near Cairo University.
It said that more tribunals tracking terrorism-related cases would be set up.
"The amendments have broadened the definition of terrorism," justice minister Nayyer Abdelmoneim Othman told private satellite channel CBC Extra.
"They reflect what is happening now and take into consideration many things that have changed in the past three years," Othman said, adding that there were some groups who were a "burden to the country's security", referring to Morsi's Muslim Brotherhood movement.
The Brotherhood was designated a "terrorist organisation" after the authorities blamed it for several deadly bombings. It regularly calls for pro-Morsi protests which often descend into clashes with police or his opponents.
Most of the attacks have taken place in the lawless Sinai Peninsula, but the jihadists have increasingly targeted police in the capital and in the Nile Delta to its north.
"These amendments give the authorities power to pursue these crimes, detect them and firmly confront them," Othman said.
The Brotherhood and Morsi supporters have been targeted in a deadly police crackdown since his ouster.
Amnesty International says that more than 1,400 people have been killed in clashes since the crackdown began last July.
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