The controversial proposal backed by 86 in favour against 39 Scottish Parliamentarian in the final vote, lowered the minimum age that people can apply for a Gender Recognition Certificate (GRC) from 18 to 16.
Scotland has become the first part of the United Kingdom to approve a self-identification system for people who want to change their legal gender.
The controversial proposal backed by 86 in favour against 39 Scottish Parliamentarian in the final vote, lowered the minimum age that people can apply for a Gender Recognition Certificate (GRC) from 18 to 16.
BBC reports that the reforms were opposed by several SNP MSPs, with one government minister resigning in protest earlier this year.
There were shouts of "shame on you" from protesters in the public galley as the result was announced.
People in Scotland have already been able to change their legal gender from male to female or female to male since 2005.
The Scottish government believes the existing process can be intrusive and distressing and put people off applying for a Gender Recognition Certificate (GRC).
Speaking ahead of the vote, Social Justice Secretary Shona Robison said: "Trans rights are not in competition with women's rights, and as so often before, we can improve things for everyone when those discriminated against act as allies, not opponents."
But critics have raised concerns about the potential impact on women-only services, spaces and legal protections.
The new rules, which are expected to come into force sometime next year, will lower the minimum age that people can apply for a GRC from 18 to 16.
They will also remove the requirement for a medical diagnosis of gender dysphoria.
And applicants will now only need to have lived in their acquired gender for three months - or six months if they are aged 16 and 17 - rather than two years.
There will be also be a three-month "reflection period" during which they can change their minds and it will be a criminal offence to make a false declaration or false application for a GRC, with anyone who does so potentially facing up to two years in prison.
But it will be possible to de-transition by going through the process again.
The reforms have been one of the most controversial pieces of legislation in the history of the Scottish Parliament, with Community Safety Minister Ash Regan resigning in October after saying she could not support the proposals.
MSPs spent a total of about 24 hours this week debating it after two marathon sessions considering more than 150 proposed amendments to the bill on Tuesday and Wednesday - with the latter not finishing until 01:15 on Thursday.
The Conservatives were accused of attempting to delay the legislation by proposing numerous points of order and forcing almost all amendments to votes that were sometimes not required.
Scotland is now the first part of the UK to have approved a self-identification process for legally changing gender.
It is a simplification of the current system, removing the need for medical certification, as has already happened in countries like Ireland and Denmark.
The epic debate and vote at Holyrood is not the end of the story because the legislation could yet face a legal challenge from women groups.
The UK government, which has expressed concerns, is reserving its position on whether or not it will accept Scottish gender recognition certificates.
The Scottish government has yet to decide when in 2023 it wants the new process to take effect and has agreed to monitor the impact of the arrangements.