Environment Minister Peter Kent made the announcement at a news conference in Halifax, saying the bill marks the last step in the designation of the island for protection under the Canada National Parks Act.
"With the passing of this legislation, Sable Island will be protected for present and future generations," Kent said in a statement.
The federal and Nova Scotia governments first announced the island would become a national park in May 2010.
Provincial Natural Resources Minister Charlie Parker said Nova Scotians consider the sand bar "an integral part of their maritime heritage."
Federal officials say the designation represents the highest level of protection under federal law.
The 40-kilometre long island, known for its wild horses, sand dunes and fragile environment, sits in the North Atlantic about 300 kilometres southeast of Nova Scotia.
After the designation process was announced in 2010, public consultations were held to determine how many people could visit the island and how the new park will be operated.
Some environmentalists have expressed concern about more visitors coming to the island, but the Halifax-based Ecology Action Centre says Parks Canada has a good reputation when it comes to managing remote sites.
Typically, a small number of researchers work on the island. Visitors require permits and the cost of a round-trip flight is about $5,000.
Parks Canada has already said it has no plans to build up infrastructure on the island to accommodate more visitors.
Between 100 and 200 people visit the island every year. About 50 are sightseers and the rest are researchers or employees of Environment Canada and Fisheries and Oceans Canada.
Aside from its wild beauty, Sable Island is also known as a potentially rich resource for natural gas.
The Sable Offshore Energy Project, which includes wells within sight of the island, has been in production since 1999.
Ottawa has said the park designation will have no impact on drilling rights that exist off the island's shores.
However, exploration drilling is banned on the island and there is a 1.8-kilometre exclusion zone around the island that also prohibits drilling.
Known as the graveyard of the Atlantic, Sable Island is home to about 400 wild horses whose ancestry traces back to some of the 223 ships known to have wrecked on its shores and hidden reefs since the mid-1700s.
The island's grasslands, mud flats and sandy beaches also support the world's largest congregation of breeding grey seals and several species at risk, including the vulnerable Ipswich Savannah sparrow.
But the island is no pristine wilderness. There are two light stations there, an airstrip, weather station and a collection of buildings used mainly by researchers.