A special session of Chile's Congress has voted to scrap elements of the constitution left over from the military rule of Gen Augusto Pinochet.
This is a day of joy and national unity: President Lagos
The decision abolishes a system of appointed senators and gives Chilean presidents the power to sack commanders of the armed forces.
President Ricardo Lagos said Chile's constitution was now worthy of a democracy.
Gen Pinochet seized power in 1973 and ruled Chile until 1990.
"This is a day of joy and national unity," said President Lagos after the 150-3 vote in a joint session of the senate and lower house, with one abstention.
He added: "Congress has made possible that from now on, Chile can show the world a constitution that makes our country a full member of the democratic [community of] nations."
Another amendment to the constitution will be to reduce the presidential term from six to four years.
But Mr Lagos acknowledged that his government still needed to reform the electoral system, which critics say favours the right and excludes smaller parties.
Most Chileans believe the reforms are long overdue, says the BBC's Clinton Porteous in Santiago.
But the solemn session of Congress was still disrupted by dozens of leftist demonstrators in the public gallery who said the reforms did not go far enough.
The old constitution dates back to 1980, during Pinochet's rule
Police removed them as well as two noisy pro-Pinochet supporters, our correspondent reports.
The new constitution will be signed into law by President Lagos at a ceremony in mid-September.
From March 2006, all senators will need to be elected.
The old constitution had been in effect since a controversial vote in 1980 during Gen Pinochet's rule.