The plan -- SB103 and SB104 -- is now headed to Gov. Jerry Brown, who had announced the plan in a press conference last week. The emergency measures will take effect immediately after Brown signs the legislation.
The plan redirects money in the state budget and draws from two bonds previously approved by voters.
It includes $472 million in accelerated grant funding for water conservation and recycling projects. Another $15 million will go to communities running low on drinking water supplies while $47 million provides food and housing assistance for people in drought-stricken communities.
"This is a lot of money that will help thousands of California families dealing with the drought," Senate President Pro Tem Darrell Steinberg, D-Sacramento, said.
The plan also increases penalties for illegally diverting water and expands the State Water Resources Control Board's authority during a state of emergency. One provision was amended Wednesday to limit the board's ability to issue fines, after Republicans raised concern about language infringing on existing water rights.
Other spending contained in the legislation includes $77 million in bond money for flood protection, $40 million for water efficiency and water-saving irrigation projects, and $1 million for a conservation-awareness campaign.
The bills passed with large bipartisan majorities, even though a handful of Republicans in each house voted against them.
Food experts say the drought is already starting to hurt all Californians at the grocery store. Food prices could rise as much as 10-15 percent due to drought. The Fresno County Farm Bureau says 50 percent of Central Valley farmland isn't being used to grow anything because of the lack of rain. That region grows most of our country's food.
The Associated Press contributed to this report.