Argentina's Senate approves move to nationalise YPF,a subsidiary of Spain's Repsol.
The US, EU and Spain have vigorously opposed the move.
Argentina announced that it would seize 51% of YPF shares earlier this month.
26% of the shares are to be held by the federal government and 25% by the provinces
Sixty-three Senators voted in favour of the take-over, with just three voting against it and four abstaining, as the bill was sent to the Chamber of Deputies, which was also expected to overwhelmingly approve of it on May 3.
Spain has led a chorus of international outrage at the move, saying it harmed bilateral relations and would deny Argentina much-needed foreign investment and expertise in the oil sector.
But the take-over is popular in Argentina, where it is supported by the government and the opposition. Buenos Aires has accused Repsol of failing to invest in its oil sector, forcing a spike in costly imports.
"No one will shed a tear for Repsol in Spain, because they are making investments outside of Spain and confounding a company and a country," Miguel Pichetto, head of the governing bloc in the Senate, said ahead of the vote.
YPF produces 34% of Argentina's oil and 25% of its gas, and the company holds some 54% of the country's refining capacity, according to the private Argentine Petroleum Institute (IAP).
Argentina's oil imports doubled to $9.3 billion in 2011 from the previous year and are set to top $12 billion this year, according to official figures.
Earlier this week the Standard & Poor's ratings agency downgraded its credit outlook for Argentina from stable to negative, largely due to the YPF take-over.
Argentina declared YPF a public utility on April 16. Later the same week it extended the move to YPF Gas, a separate company 85% owned by a division of Spain's Repsol.