The upper house of parliament voted in favour of Renzi's latest attempt to cut out waste and revive the eurozone's third largest economy.
The premier, who came to power last month, had rushed the vote in an attempt to uphold a promise to the Italians to implement a series of fast-paced reforms.
The 39-year-old, whose centre-left and right coalition only boasts a small majority in the upper house, won comfortably with 160 senators voting in favour of the bill compared to 133 against.
"Reducing political costs is a prerequisite for being able to hand back 80 euros (USD 110) to citizens," he said, referring to a promise that 10 million Italians would see their monthly pay packets boosted by that amount.
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