The so-called "time-frame argument" at the center of the controversy maintains that Indigenous peoples should not have the right to protected reservations on lands where they were not present in 1988, when the country's current constitution was ratified.
However, Indigenous organizations argued in a lawsuit that such an approach violated their rights, given that many native groups were forced from their ancestral lands, including during the military dictatorship that ruled Brazil from the 1960s to 1980s.
The country's top court sided with that position last week, in a win for Indigenous activists and climate campaigners.
But the Senate on Wednesday approved the bill centered on the "time-frame argument," with 43 votes for and 21 against. Last year the bill, championed by the country's powerful agro-business lobby, had cleared the legislature's lower chamber.
Senate President Rodrigo Pacheco insisted "there is no confrontation" between his chamber and the Supreme Court.
"This is simply a position of the Senate, given that we believe that matters of this nature must be deliberated by parliament," he said.
Environmentalists had joined Indigenous activists in pressing for the top court to reject the time-frame argument.
Numerous studies have found that protected Indigenous reservations are one of the best ways to fight deforestation and, with it, climate change.
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