Of the 151 lawmakers who voted Wednesday, just three voted against the bill.
Under the law, set to take effect in 2015, emissions limits will apply to companies that discharge 125,000 tons or more of carbon dioxide annually or workplaces that emit at least 25,000 tons a year, said the Ministry of Knowledge Economy.
The government is considering fining $88 for each ton of greenhouse gas emissions that a company releases above the limit.
The measure will help Seoul to develop new technologies and to play in an international carbon exchange sector that by 2010 had grown into a $141.9 billion market, the ministry said.
South Korea is the third country in the Asia-Pacific region after Australia and New Zealand to adopt an emissions scheme.
The Federation of Korean Industries, representing the country's major conglomerates, had opposed the plan, arguing that such a system would adversely affect the country's export competitiveness.
South Korea, the world's seventh largest polluter, aims to reduce greenhouse gas emissions 30 percent less than expected levels in 2020, or a 4 percent reduction compared with 2005 levels.
The country's greenhouse gas emissions have doubled to about 600 million tons from about 300 million tons in 1990, a government official said, The Wall Street Journal reports.
Noting that South Korea is one of 34 countries around the world that will adopt emissions trading, Australia's Climate Change Minister Greg Combet applauded Seoul "for taking this important step to drive sustainable growth and reduce greenhouse gas emissions."
He said South Korea's system is similar to Australia's carbon pricing mechanism, which goes into effect in July.
"Around the world, developed and developing countries are moving to tackle climate change by pricing carbon," he said in a statement.
"There is a growing acceptance that market mechanisms like emissions trading schemes and carbon prices are the cheapest and most efficient way of reducing emissions."
Last week Combet visited China and South Korea and discussed carbon trading with government officials. He had said that once those two countries start trading carbon, there can eventually be an integrated Asia-Pacific system which could also include Australia, New Zealand, California and parts of Canada.
So far, California is the only state in the United States to adopt an emissions scheme.
The Chinese government plans to run pilot carbon trading schemes in seven major cities. It aims to introduce a national carbon trading scheme by 2015.
"In the Asia-Pacific region there is scope in the years to come for us to develop quite an integrated approach," Combet told the Australian Broadcasting Corp. last week.
"A common carbon price could evolve from that, between our economies, which removes any issue of competitive disadvantage."