Two MPs abstained in what was a close vote
Parliament in Iceland has voted by a narrow majority to set in motion an application to join the European Union, after five days of gruelling debate.
Prime Minister Johanna Sigurdardottir of the Social Democrats has also been pushing for the adoption of the euro as the Nordic country's currency.
The bid must now be approved by the EU, after which Iceland's people will be asked to vote on it in a referendum.
Ms Sigurdardottir said that several years of negotiations lay ahead.
EU commission chief Jose Manuel Barroso welcomed the vote, saying Iceland was a "European country with long and deep democratic roots".
Opponents of the bid fear EU quotas could hurt Iceland's fishing industry.
Correspondents say Iceland, with a population of just 320,000, has traditionally been sceptical about joining the EU.
But many people there have warmed to the idea of membership following the devastating economic meltdown which saw the top Icelandic banks collapse in a matter of days last year.
The government will formally submit Iceland's bid to the EU in Brussels on 27 July, at a meeting of its foreign ministers.
Arni Thor Sigurdsson, chairman of the parliamentary committee handling EU issues, told Reuters news agency that Iceland would not be ready to join the EU any earlier than 2013.
Members of the 63-seat Althingi, Iceland's parliament, backed the proposal to start membership talks with the EU by 33 votes to 28, with two abstentions.
ICELAND'S EU BID
16 July: Parliament backs bid by slim majority
27 July: Bid due to be submitted to Brussels
February 2010: Entry talks may begin
Late 2011/early 2012: Bid goes to popular referendum
2013: Earliest date Iceland can realistically join
Source: Arni Thor Sigurdsson, chairman of parliamentary committee on EU issues, quoted by Reuters
Five members of the Left Green party, the Social Democrats' partner in the coalition government, rejected it, AFP news agency reports.
The Social Democrats and the Left Greens formed a government at the end of April following a general election.
Interviewed by Reuters, Prime Minister Sigurdardottir said that Thursday's outcome was "probably the most historic vote in the history of [Iceland's] parliament".
"I sincerely hope and believe that we will end up with an agreement that will help us create the necessary economic stability, ensure prosperity in the long term for both families and businesses," she said.
Mr Barroso said the Icelandic vote was proof of the "vitality of the European project and indicative of the hope that Europe represents".
Iceland's Business Minister, Gylfi Magnusson, believes that euro zone membership would help stabilise the country's currency.
"The main benefits of EU membership at the moment would be the possibility of joining the exchange rate mechanism, and eventually adopting the euro," he told the BBC before the parliamentary vote.
Michael Emerson, a political analyst at the Centre for European Policy Studies, warned that Icelandic entry was not a done deal.
"It remains to be seen whether some issues like fish will prove difficult negotiation points," he said.
"And then we will have to see if the Icelandic people still like the idea. A 'Yes' should not be taken for granted. There'll be tensions."