MSPs have ruled out giving Gaelic equal status with English under Scottish law.
The bill will give Gaelic official recognition across Scotland
The Scottish Parliament unanimously approved the Gaelic Language (Scotland) Bill on Thursday.
Politicians voted down an SNP amendment to give the language "equal validity" with English and instead agreed that it should be given "equal respect".
Education Minister Peter Peacock, who has responsibility for Gaelic, said the decision marked a historic day for the nation's native tongue.
The bill is expected to receive Royal Assent in the coming weeks and is due to become law before the summer.
Mr Peacock said there was a danger that giving the two languages equal legal status could result in a court ruling requiring all public services to be made available in Gaelic.
He told fellow MSPs: "This bill gives clear recognition to the language as an official language, commanding equal respect with the English language.
"There is a real danger that the interpretation by the courts could result in a meaning of the status that this parliament does not intend and could not be delivered.
"Using the phrase equal validity in the bill carries a significant risk that the court could rule that the bill should result in the right to demand the use of the language in a wider range of circumstances than is intended."
The SNP's Alex Neil said it was a day when the Gaelic language was going forward, not backwards.
He added: "We still face a major challenge. It is estimated there is still a net loss of about 1,500 Gaelic speakers in Scotland every year and also that we have a dire shortage on the education front of decline of 1,500 Gaelic-speaking teachers.
"The passage of the bill of itself will not actually address or solve these problems, but what it does do is send a clear message about the serious intent of the parliament in addressing all the problems faced by the Gaelic language."
Tory education spokesman Lord James Douglas Hamilton said the bill was a landmark for Gaels and their culture.
However, his party colleague Ted Brocklebank, a member of Holyrood's Scottish traditional arts group, said the attempts to revive Gaelic were commendable but that Mr Peacock had not explained how it would be saved using the measures in the bill.
He said: "The only problem is that with Gaelic facing wipe-out, this well-meaning but ultimately impotent piece of legislation is likely to be as successful as prescribing a throat lozenge for a pneumonia patient."
The bill will now hand the future of the language over to a new body, Bord na Gaidhlig, which has statutory powers to control its development.
Its chairman, Duncan Ferguson, said: "This is a truly significant moment in the history of the Gaelic language and culture.
"Gaelic has been officially recognised as an important and valuable part of the living culture of a thriving new Scotland.
"It is a time to look to the future, to a new and confident generation of Gaelic speakers, to new opportunities to learn and to use Gaelic, and to a greater understanding and respect for the Gaelic language and culture."
A final amendment also ensures that it is not a prerequisite for all the board's members to be fluent Gaelic speakers.
Pressure to preserve the ancient language came as the number of Gaelic speakers has fallen.
The 2001 Scottish census found 58,652 speakers compared with 66,320 in 1991 and 254,415 in 1891.