Speaking to the media after the bill approved by the Cabinet without any change, HRD minister Kapil Sibal said, "This is a milestone which will enhance choices, increase competition and benchmark quality."
The bill is now on its way for its introduction in the parliament.
The four-year old bill has been hanging in balance as it invited opposition from certain groups, including the Left front over a few provisions.
A Committee of Secretaries brought modifications to certain provisions after it was referred to the committee in 2009.
The foreign education providers bill, which is one of the major reforms bills of the HRD ministry, seeks to to regulate the entry and operation of foreign institutions.
Prescribing a eight-month time bound format for granting approval to foreign educational institutions to set up campuses, the bill requires the foreign institutions to go through registration process during the time to be registered with UGC or any other regulatory body.
After examining the proposals of the institution with respect to the country's needs and priorities, the regulatory body in place will advise the government on whether to allow the institute operate in India or not.
Quota laws will not be applicable to these foreign universities setting up operations in India.