The Defence (Amendment) Bill passed all stages in the Dáil last night.
The bill was passed by 98 votes to 12.
The legislation will allow members of the Defence Forces to be trained abroad and to participate in EU battlegroups or rapid response units.
The Minister for Defence, Willie O'Dea, said the bill meant that for the first time the Government would have the authority to dispatch members of the Defence Forces to respond to humanitarian crises and disasters.
Opposing the legislation, Independent TD Tony Gregory told the House that he saw the bill as another step away from Irish neutrality.
Martin Ferris of Sinn Féin said EU battlegroups could be used to go into war.
