Victoria has become the third jurisdiction in Australia to decriminalise sex work.
The new laws passed Victorian Parliament's Upper House on Thursday night, clearing their final hurdle.
They will go back to the Lower House for a final vote, where the government has a clear majority.
The repealing of the Sex Work Act 1994 is the first step in a two-year long process that will see licensing and zoning regulations dramatically changed, street sex work decriminalised and STI testing mandates scrapped for sex workers.
It is expected the reforms and repealing of the sex work licensing system currently in operation in Victoria will come into full effect by December 2023.
MP Fiona Patten has campaigned for the decriminalisation of sex work during her time in parliament and, in November 2019, was appointed by the Andrews government to lead a review into sex work laws.
Ms Patten said it was a "pretty historic day" for Victoria with the repealing of the law.
"This has been a campaign that really started in the early 1980s and we have seen iterations of legislation designed to control and effectively stigmatise sex workers," Ms Patten said.
"We have legislation currently in place that is not fit for purpose. It doesn't work on any meaningful level, it doesn't protect anyone and, in fact, it does quite the opposite."
The Sex Work Decriminalisation Bill 2021 was introduced to the Legislative Assembly in October last year, and moved into the Legislative Council after a proposed amendment by the Opposition was defeated.
Coalition MPs have argued the legislation is a "missed opportunity" that does not achieve its objectives of protecting women.
"Unfortunately, the Andrews Labor government has tried to ram through another piece of legislation without safeguards in place and without time for proper consultation and scrutiny," Shadow Minister for Consumer Affairs Roma Britnell said.
The removal of offences and criminal penalties for individuals participating in the act of consensual sex work in most circumstances, the amending of advertising controls and introduction of anti-discrimination protections for sex workers is slated to begin this year as early as March.
