Brown signed the bill into law at a ceremony in downtown Los Angeles.
The minimum wage, currently at $8 an hour, will rise to $9 an hour on July 1, 2014. On January 1, 2016, it will rise to $10 an hour. California's minimum wage will be one of the highest rates in the U.S.
The increase is the first to California's minimum wage in six years.
Brown called the bill an overdue piece of legislation that will help working-class families and close the gap between "workers at the bottom and those who occupy the commanding heights of the economy."
The governor was joined by state legislators and business owners who supported the measure, saying increased wages would boost the state's economy.
The state Senate approved AB10 on a 26-11 vote Sept. 12, and the Assembly followed hours later on a 51-25 vote. Both chambers voted largely along party lines.
In opposing the measure, Republican lawmakers said increased wages would encourage businesses to cut jobs and automate.
The California Chamber of Commerce was against the bill, saying it will drive up businesses' costs by ratcheting up other wages and workers' compensation payments.
Federal law sets a minimum wage of $7.25 per hour, but California is among 19 states and the District of Columbia that set a higher state minimum wage.
The federal minimum provides $15,080 a year assuming a 40-hour work week, which is $50 below the federal poverty line for a family of two. More than 15 million workers nationally earn the national minimum, which compares with the median national salary of $40,350, according to the U.S. Bureau of Labor Statistics.
President Barack Obama has sought an increase of the federal minimum wage to $9 an hour.
Among states, Washington has the top minimum wage at $9.19 an hour, an amount pegged to rise with inflation. But some cities have set higher rates, including San Francisco, which has the nation's highest minimum wage at $10.50 an hour.
The California bill does not index the rate to inflation, meaning it would remain at $10 per hour unless the Legislature raises it again in the future.
The Associated Press contributed to this report.