The law is meant to fairly distribute revenue from the world's third largest oil reserve located mainly in the Shiite south and Kurdish north of Iraq. Sunni Arabs, who live in areas of little oil reserves, have been concerned they would be left out of the windfall.
The cabinet had approved the draft law in February, but faced opposition from Kurds, who felt it was unfair to them. But in June, Kurdish officials and Iraq's central government came to an agreement on the distribution of oil wealth, giving the Kurdish region 17 percent of all oil revenue.
"I call on all our partners in the political process and in this national unity government to respect this deal," said Shiite Prime Minister Nouri al-Maliki, reported Reuters.
The law also intends to set up a framework for attracting foreign investment.
Other major laws awaiting passage would set up provincial elections by the end of the year and let some members of Saddam Hussein's Baath Party return to the government and the military. Al-Maliki said these bills would be discussed next week.