Nigerian President Olusegun Obasanjo has signed into law new legislation breaking the monopoly of the national union federation.
The unions have repeatedly clashed with the government over fuel price rises
Last year, strike action called by the federation paralysed the country's major cities for almost a week.
The new law makes union membership voluntary, and gives unions the right to form outside the umbrella group, the Nigeria Labour Congress.
The law also bans strikes in essential services like health and education.
The bill is designed to curb the power of the NLC but union leaders say they believe the reform is intended to break down opposition to the government.
President Obasanjo has accused NLC leaders of running a "parallel government".
Last year the Nigerian Labour Congress (NLC) called three crippling general strikes against fuel prices rises.
An NLC official said that it was impossible to ban protests. "Everybody has a right to protest. We see the enactment of this law as a challenge for us to work harder. Protests will now be completely deregulated," NLC national mobilisation officer Denja Yaqub told AFP news agency.