Authored by Senators John McCain and Ben Cardin, the Burma Human Rights and Freedom Act now moves to the Senate floor for vote.
A similar legislation needs to be approved by the House of Representatives before it can be signed into law by the US President.
The US continues to call Myanmar with its previous name Burma.
The bill proposes to prohibit certain military cooperation with the military of Myanmar until the Departments of State and Defence can certify that officials have halted the violence.
It is co-sponsored by more than a dozen other Senators from both the Republican and Democratic parties.
In a joint statement, McCain and Cardin said ultimately, it is up to the people of Myanmar to decide what the fate of their country and democracy will be.
But the US Congress should not be complicit spectators to ethnic cleansing and gross human rights violations.
"For too long we have said 'never again', but failed to act with resolve when confronted by mass atrocities. Congress has historically played an important role in promoting human rights and democracy in Burma and it is time for us to step up again and provide leadership to support a successful transition to democracy," the statement added.
It has already used existing authorities to impose restrictions on one key officer implicated in the abuse and should take this cue from Congress to target other leaders now.
"The world has come to realise that the Myanmarese government - and in particular its military - are in a state of outright obstruction with respect to international calls to address the crimes committed in Rakhine State and will not take steps to address the past atrocities unless real world consequences make it impossible for them not to," they said.
Observing that the scale of human rights abuses against the Rohingya people and other minority communities in Burma has been staggering, McCain said the United States has a moral obligation to do all it can to prevent mass atrocities and ethnic cleansingand to make clear to those responsible that their actions will not be tolerated.
The passage of the legislation is a step in the right direction to protect Burma's fledgling democracy and hold accountable the senior military officials responsible for the slaughter and displacement of more than 680,000 innocent Rohingya men, women and children.
This legislation if signed into law will make it easier for the administration to impose sanctions on the Burmese military leaders who are implicated in some of the worst atrocities facing the international community in a generation.
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