President Zardari has long indicated he would back the new measures
Pakistani President Asif Ali Zardari has signed major constitutional changes into law, ceding key powers to the prime minister and parliament.
These include the president's power to dissolve an elected parliament and the right to appoint military chiefs.
Many powers were acquired under former military rulers and correspondents say the changes are intended to strengthen democracy in Pakistan.
Both the upper and lower parliamentary houses passed the bill unanimously.
As part of the reform package, North West Frontier Province (NWFP) has officially been renamed Khyber Pakhtunkhwa.
The legislation has sparked violent protests among a non-Pashtu speaking ethnic minority in the province.
Under the new measures, Pakistan's President Zardari becomes largely a titular head of state who can dismiss parliament only on the advice of the prime minister.
The prime minister is now the most powerful man in the country, with complete control of Pakistan's nuclear and conventional forces, the BBC's Syed Shoaib Hasan in Islamabad says.
The measures have been a long-standing policy of Pakistan's political parties, but especially of the Pakistan People's Party (PPP) - previously led by Benazir Bhutto, the murdered former prime minister and wife of Mr Zardari.
Other measures include:
- A judicial commission, not the president, will appoint judges
- The president will no longer appoint the chief election commissioner
- Elections of the prime minister and provincial chief ministers will no longer be a secret ballot - an attempt to stop clandestine deals
- The president will no longer be able to impose emergency rule in a province unilaterally