Opposing the law would have risked alienating his supporters and ceding ground to Jewish Home.
According to Haaretz, the bill was drafted ostensibly to "regulate settlement in Judea and Samaria and allow its continued establishment and development".
"The law passed by the Knesset today proves yet again that Israel has no intention of ending its control over the Palestinians or its theft of their land", the group said in a statement.
However, doubts were lifted when the premier told reporters accompanying him to London on Monday that the vote would go ahead after he had "updated" President Donald Trump's administration, a spokesman for Netanyahu told the AFP news agency. To assign the entire West Bank to one side or the other in the Palestinian-Israeli dispute, as the newspaper has done in a number of articles this autumn and earlier this winter, ignores global agreements signed by both parties that assert the status of the land is to be negotiated.
The bill affects sixteen settlements, and gives the justice ministry the power to add more, as they see fit.
Prime Minister Benjamin Netanyahu was not present for the vote, as his scheduled return from a trip to the United Kingdom was delayed.
Houses in the West Bank Jewish settlement of Karmel, near Hebron, on May 24.
Monday's contentious vote took place after Israel said it had started demolishing a small Jewish settlement deemed illegal by the Supreme Court because it was on private Palestinian land.
The new law will allow Israel to legally seize Palestinian private land on which Israelis built without knowing it was private property or because the state allowed them to do so.
Defence Minister Avigdor Lieberman said last week: "The chance that it will be struck down by the Supreme Court is 100 percent".
Netanyahu said he was looking forward to discussing the matter at the White House on February 15.
But after Netanyahu announced plans to build over 6,000 new settler homes during Trump's first two weeks in office, the White House over the weekend signaled that it too may have its limits.
The White House said last month that Trump emphasized "the deep and abiding" partnership between the two countries and that he "affirmed his unprecedented commitment to Israel's security".
Trump has signaled a far more sympathetic approach to the settlements, raising hopes in Netanyahu's government that it will be able to step up construction. "When I manage the country, I think about our national interest".