Both the president and prime minister backed the vote on the constitution
The Kenyan parliament has approved a draft constitution, after nearly 20 years of acrimonious debate.
The new constitution goes to the Kenyan people in a national referendum later this year.
The document provides for greater checks on presidential powers and more regional devolution.
As part of a power-sharing deal to end deadly riots following elections in December 2007, it was agreed that a new constitution would be written.
The previous constitution was criticised for concentrating too much power in the hands of the president.
The draft constitution also recommends:
• power be devolved to a senate and a network of local counties
• the president should no longer be able to appoint judges
• MPs appointed to a cabinet position should be obliged to give up their parliamentary seat
President Mwai Kibaki told Bloomberg news agency: "We have gone through a very difficult time and I'm quite sure myself this is the greatest step we have taken so far."
His power-sharing partner, Prime Minister Raila Odinga, said it was a "historic moment".
An earlier attempt to amend the constitution failed five years ago.
Calls for a new constitution began during the time of President Daniel arap Moi, who stepped down in 2002 after 24 years in power.
Many felt the presidency was too powerful as during the 1980s opposition political parties were outlawed and his regime was accused of human rights abuses.
It was only pressure from foreign donors that forced a return to multi-party politics in 1992.