In a historic move to end dependency on China when it comes to semiconductors, manufacturing and other technologies, the US Senate has passed a $280 industrial policy bill.
The measure passed 64 to 33, with 17 Republicans voting in favour, The New York Times reported on Wednesday.
The legislation will now go to the House, where it is expected to pass with some Republican support.
US President Joe Biden, who has backed the package for more than a year, could sign it into law as early as this week, the report mentioned.
"The Senate passed a historic bill that will lower costs and create jobs. As Americans are worried about the state of the economy and the cost of living, the CHIPS bill is one answer: it will accelerate the manufacturing of semiconductors in America, lowering prices on everything from cars to dishwashers," Biden said in a statement.
The CHIPS bill, short for Creating Helpful Incentives to Produce Semiconductors for America Act, would provide $52 billion in subsidies and additional tax credits to companies that manufacture chips in the US.
It would also add $200 billion for scientific research, especially into artificial intelligence (AI), robotics, quantum computing and other new-age technologies.
Many senators, including Republicans, saw the legislation as a critical step to strengthen America's semiconductor manufacturing abilities as the nation has become perilously reliant on foreign countries - especially an increasingly vulnerable Taiwan - for advanced chips.
The bill will now head to the House, where lawmakers hope to pass it and send it to the White House for the President's signature before Congress leaves town.
"This is going to go down as one of the major bipartisan achievements of this Congress, along with the Infrastructure Investment and Jobs Act and the recent gun safety law," said Senate Majority Leader Chuck Schumer, D-NY.
"The American people deserve to see more examples like this, of both sides coming together to do very, very big things that will leave a lasting impact on our country,a he added.
The Biden administration said that enhancing the chip industry at home will also help ease supply chain disruptions.
