James Raynolds reports from Santiago: "A date which divides Chile"

Until now, attempts to abolish the holiday had been blocked by supporters of the former military leader, General Augusto Pinochet, who have a majority in the Senate.

But this time a compromise has been agreed with senators, including Mr Pinochet himself, decided to replace the holiday with a new Day of National Unity.

"It is a question of forming national unity in one shape or form," Mr Pinochet said after the vote.

The national holiday bill must go back to the lower house for approval.

The BBC correspondent in Santiago, James Reynolds, says many Chileans hope the compromise is a sign of reconciliation for a country still divided by the memory of seventeen years of military rule.

Day of violent protests

After ousting the government of the socialist president Salvador Allende in 1973, Mr Pinochet ruled the country with an iron fist until 1990.

At least 3,000 people died under his regime and around 50,000 fled into exile. Thousands more were tortured.

The coup anniversary has traditionally provoked violent demonstrations by anti-Pinochet students and left-wing groups.

The first Day of National Unity will be celebrated in 1999 and this year's holiday on September 11 will be the last.

It coincides with the 25th anniversary of the military coup.