Zimbabwe's parliament has passed a compromise bill on constitutional change that will allow presidential and parliamentary elections in 2008.
Analysts say President Mugabe wants to choose his successor
Members of parliament from both the ruling Zanu-PF and the fractured opposition Movement for Democratic Change (MDC) supported the bill.
All 111 MPs present voted in favour of the bill to amend the constitution.
The bill, the result of talks led by South Africa, allows parliament to pick President Robert Mugabe's successor.
The amendments are expected to re-draw electoral boundaries, increase the number of MPs and bring forward parliamentary elections by two years.
The bill also allows parliament, dominated by Mr Mugabe's Zanu-PF, to choose a presidential successor if the incumbent does not finish his term in office.
Analysts expect Zanu-PF to dominate the joint parliamentary and presidential elections next year and for Mr Mugabe to then put a hand-picked successor in place.
But MDC member of parliament Trudy Stevenson told the BBC news website that Mr Mugabe may not have enough support within Zanu-PF to install his own choice as president should he leave office early.
Zimbabweans are suffering severe shortages of food and fuel
Mr Mugabe, 83, has been president of Zimbabwe since independence from the UK in 1980.
The country is in the grip of a deep economic crisis which saw inflation soar past 7,000% in July before slowing in August to about 6,500% - still the world's highest rate by far.
There is a new spirit of consensus between the MDC and the government following talks mediated by South Africa's President Thabo Mbeki, says the BBC's Peter Biles in Johannesburg.
The MDC supported the bill because it will eliminate appointed MPs from parliament and will make the commission in charge of re-drawing electoral boundaries more independent, said Ms Stevenson.
The opposition still wants a completely new constitution, but Ms Stevenson said an understanding had been reached in the mediation process to produce such a document.