The bill was passed after a compromise agreement last month between the federal government party and the opposition Labour party. Legislation passed the Australian senate house with 41 votes to 14.
Clean Energy Council (CEC) chief executive Kane Thornton said the bill would end the country's renewable energy "crisis".
"While we are disappointed by the level of reduction of the target for large-scale renewable energy, the passage of this legislation provides the platform for a doubling of renewables over the next five years," Thornton said.
He added: "This legislation will lead to more than A$40 billion (US$31 billion) of investment and the creation of 15,200 jobs over the life of the RET."
Debate over the future of the RET has caused heated debate in the Australian energy sector.
The RET is a subsidy programme that was introduced in 2009, with a target for large-scale renewables to produce 41TWh by 2020 – approximately 20% of Australia's projected energy demand.
Prime minister Tony Abbott – accused of backtracking over an election pledge to maintain the RET – appointed known-climate sceptic businessman Dick Warburton to lead the review.
The review made two recommendations: either it should be closed off to new participants and only fulfil existing contractual obligations until 2030, known as grandfathering; or it should be linked to growth in energy demand. This would have resulting in a cut in required capacity.
Uncertainty over the future of the target has all but dried up the country's wind energy pipeline. The CEC claims investment in renewable energy has fallen 88% since the government set up the review.
A Senvion Australia spokesperson said: "Senvion Australia welcomes the passage of the amended RET legislation, and is relieved that the political impasse is finally over.
"Bipartisan support for renewable energy is critical to rebuilding investor confidence in the clean energy sector. Senvion Australia is hopeful that the amended RET will start to unlock the investment in new wind farms needed to move to a lower carbon economy," she added.