"It is a unanimous decision of the house... This is a rare thing," Deputy Chairman PJ Kurien announced after the bill was passed.
The bill envisages creation of a national commission for transgender communities, and state level commissions.
DMK member Tiruchi Shiva, who moved The Rights of Transgender Persons Bill, 2014, said: "We say human rights are for all, why some people are neglected."
"We all have human rights, whatever our gender identity. The bill I have presented is for an act which will create an equal society as it recognises and protects transgender persons, in all spheres of life," said Shiva.
"Different countries have taken steps, why not India?" he questioned.
The bill was later adopted by the house through a voice vote.