The Legislative Assembly of the Australian Capital Territory adopted the controversial legislation in a late night vote on Thursday.
The conservative federal government of Prime Minister John Howard had threatened to block the law, saying it contravened a federal Marriages Act that it amended two years ago to formally define marriage as a union between a man and a woman.
But a spokesman for Attorney General Phillip Ruddock said a number of last-minute amendments to the legislation appeared to satisfy government concerns, notably one specifying that civil union ceremonies would not be officiated by federally recognised marriage celebrants.
The Labor ACT Chief Minister, Jon Stanhope, conceded the law had been amended to meet federal concerns, saying the civil unions "will deliver recognition, without conflicting with or changing the meaning of marriage".
But the territory's Municipal Services Minister, John Hargreaves, said the new law was still a landmark in that it gives equality and legal recognition to same-sex couples for the first time in Australia.
"It should be a major plank to the removal of the insidious disease of discrimination and it is," he said.
Peter Furness of the gay rights group Australian Marriage Equality called the ACT legislation "a very significant step forward in our push towards full legal equality under Australian law."
"Couples from around the country can also now receive formal recognition and can celebrate their love and commitment in a civil union ceremony sanctioned and approved by the state," he said.