Laws allowing the government to forcibly shut down extremist organisations have passed parliament after Labor and the Liberals struck a last-minute deal.
The legislation aims to curb the influence of anti-Semitic hate preachers and neo-Nazis in the wake of the Bondi Beach terror attack.
Despite a split within the coalition over the proposal, the government secured the numbers to pass the bill through the Senate late on Tuesday night.
Opposition Leader Sussan Ley put forward a series of technical amendments which were accepted by the government, including tightening the definition of a hate preacher and setting up stricter parliamentary oversight.
Liberal senators supported the bill but the Nationals voted against it, saying it could impinge on free speech.
"The legislation needs amendments to guarantee greater protections against unintended consequences that limit the rights and freedom of speech of everyday Australians and the Jewish community," Nationals leader David Littleproud said in a statement late on Tuesday night.
Liberal Alex Antic also crossed the floor to oppose the legislation.
Prime Minister Anthony Albanese said the bill wasn't as strong as the government would have liked, but it had to be watered down to win support.
"The Australian covenant is that if people have any prejudice or hate, that's left in the customs hall," he told parliament.
The legislation allows the government to essentially outlaw hardline extremist groups, which will likely apply to neo-Nazi organisation the National Socialist Network and radical Islamist collective Hizb ut-Tahrir.
It will also strengthen the home affairs minister's ability to cancel or deny a person's visa for expressing extremist ideology.
Ms Ley said the Liberals had fixed the government's original "clumsy and deeply flawed" proposal.
Labor was forced to dump provisions clamping down on racial vilification because of a lack of political support, and also had to abandon its plans to pass hate speech and gun reforms in a single omnibus package.
"As a result of Liberal Party action, the legislation has been narrowed, strengthened and properly focused on keeping Australians safe, not political point scoring," Ms Ley said.
Executive Council of Australian Jewry co-chief executive Alex Ryvchin backed the crackdown on hate preachers, saying it would help stop Australians being radicalised to violence.
"We have no interest whatsoever in stifling debate and the public exchange of ideas ... what we're talking about is a process of radicalisation and incitement to violence, which culminates in massacres like this," he told Sky News.
Barrister Greg Barns, a former president of the Australian Lawyers Alliance, said the legislation could have unintended consequences.
"When you read the bill, even to senior lawyers, it's unintelligible," he told reporters in Canberra.
The Greens have said they would not back the hate speech legislation due to the effect it could have on political commentary including protests.
"What we've now seen in the last 24 hours is a dangerous bill being made even more dangerous," leader Larissa Waters said.
