Haley, 45, a rising Republican star, was approved by the Senate Foreign Relations Committee with wide bipartisan support, 96-4. She will replace Samantha Power.
Haley turned in her resignation as South Carolina governor minutes after she was confirmed as President Donald Trump's Cabinet pick.
She is expected to be sworn in shortly.
The two-term governor faced questions from Democrats over her lack of experience with global affairs but won plaudits from senators for her handling of prickly issues like Russia and UN actions toward Israel during her confirmation hearings.
Senator Bob Corker of Tennessee, the Republican chairman of the Foreign Relations Committee, said Haley is a proven leader who will be a "fierce advocate" at the UN for American interests.
With this, Haley becomes the first Indian-American to serve in a presidential administration at a Cabinet level position.
While nominating her, Trump had said, "Governor Haley has a proven track record of bringing people together regardless of background or party affiliation to move critical policies forward for the betterment of her state and our country.
"She is also a proven dealmaker, and we look to be making plenty of deals. She will be a great leader representing us on the world stage," Trump had said.
After Bobby Jindal of Louisiana, she is only the second ever Indian-American to be elected as the Governor of a State.
Haley would now be replaced by Lt Gov Henry McMaster as governor and will complete her term that ends in 2018.
"Governor Haley appears up to the task and seems to understand this as well," said Senator Ben Cardin, Ranking Member of the Senate Foreign Relations Committee as he voted to approve Haley's nomination as the next US Ambassador to the UN.
"What Governor Haley lacks in foreign policy and international affairs experience, she makes up for in capability, intelligence, and a track record of building coalitions in South Carolina," Cardin said.
The daughter of Indian immigrants from Punjab, Haley had said she wouldn't support one of Trump's major campaign proposals - to create a registry of Muslims in the US and a ban on Muslim immigration and travel - but suggested the administration's views had changed on the issue.
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