The move ended a heated standoff over labor rights and delivered a key victory to Republicans who have targeted unions in efforts to slash government spending nationwide.
The Assembly passed Gov. Scott Walker's proposal 53-42 without any Democratic support and four no votes from the GOP.
Protesters in the gallery erupted into screams of "Shame! Shame! Shame!" as Republican lawmakers filed out of the heavily guarded chamber and into the speaker's office.
The state's Senate used a procedural move to bypass missing Democrats and move the measure forward Wednesday night.
Walker said he will sign the measure as quickly as possible.
The Associated Press contributed to this story.