The House voted 112-1 Thursday to send the bill - SB7 - to Gov. Pat Quinn after Senate approval last month.
The measure would make it more difficult for teachers to go on strike and easier for them to be fired for poor performance.
It was negotiated in secret for months among lawmakers, education reformers and administrators, and business groups.
"There's no doubt this gives us the tools to finally achieve what has always failed at the negotiating table.The board will work through this. It gives the board the resources, the capacity and the tools to achieve what we have denied our children," said Mayor-elect Rahm Emanuel.
The Chicago Teachers Union initially agreed to the proposal but now says it opposes language that addresses current litigation and specifics about Chicago teacher strikes.
Democratic Rep. Barbara Flynn Currie of Chicago says the groups began negotiating changes Wednesday and could have an agreement that would follow in later legislation.
In another bill - HB327 - Illinois schools would see their support drop by $166 million under a budget plan making its way through the Legislature. That's about 2.3 percent less than schools get under the current state budget.
The cuts were approved 102-12 Thursday by the Illinois House.
Piece by piece, the House is approving a state budget that would be about $1 billion below what was proposed by Gov. Pat Quinn.
The Democratic governor says he opposes cutting education and vital human services.
Online: www.ilga.gov
The Associated Press contributed to this report.
