The Bundestag, the lower house of parliament, voted to tear down the roughly 30-year-old rectangular building, which housed the communist East German parliament during the height of the Cold War.
The demolition is expected to begin at the end of the month despite continuing opposition from several East Germans, including celebrities such as writer Guenter Grass, who argue the palace is part of their history.
As many as 650,000 people visited the art collections the palace housed for the last few months in an attempt to get Berlin officials to change their mind.
The building was rid of its interior core in the 1990s because it was contaminated with asbestos.
Several thousand of Berlin's citizens last Saturday protested against the planned destruction, with individuals climbing the roof of the palace at the Schlossplatz.
The demolition will cost roughly $15 million, and the Bundestag on the same spot plans to rebuild Berlin's baroque City Castle, which the communist regime blew up in 1950 to give way for the GDR's parliament. Rebuilding the castle will cost anywhere from $650 million up to $940 million, according to officials.