"This law gives President Leonid Kuchma the legal grounds for carrying our resolute economic reforms," said Vladimir Gorbulin, Kuchma's national security adviser.
The lawmakers voted 219-104, with 17 abstentions, to endorse the law on power, which allows the president to appoint the prime minister and all cabinet ministers without parliament's consent, as well as appoint and remove local administrators.
"This is a victory for common sense and Ukraine's constructive forces," Gorbulin said.
Previously, candidates for prime minister and six key cabinet posts, including the foreign and defense portfolios, were appointed only with legislative approval.
The legislators rejected an article in the new law that would have allowed the president to dissolve parliament, and another that would allow parliament to impeach the president.
However, the new law does give Kuchma the right to dismiss heads of local councils, which were previously subordinate to the parliament.
Communists, who together with socialists and agrarians tried to block the measure, said the law was a step toward establishing authoritarian power.
"This law means that Ukraine has embarked on the path from democracy to dictatorship," said Pyotr Simonenko, leader of the Ukrainian Communist Party.
Kuchma, who sent the draft law to parliament last fall, had threatened to call a referendum to approve it if the legislature failed to endorse the document.
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