Legislation cleared the upper house on Thursday with the parties making the issue a priority, paving the way for the ban to become law before the end of the year.

Government Senate leader Mathias Cormann said changes to electoral laws were needed in "good time" before the next federal election, which he says will most likely be late in the first half of 2019.

"It's a reform that seeks to ensure the electoral system in Australia is not subject to undue foreign interference," Senator Cormann told parliament.

He said the "historic" bill would ensure all political actors were subject to similar disclosure and transparency requirements.

Don Farrell confirmed Labor's support after changes to address the concerns of charities and not-for-profit organisations.

"This is one of the most significant steps forward in the Australian political system as it relates to donations," he said.

Donations of more than $100 to all "political actors" - including parties, individual candidates and significant political campaigners - from foreign governments and state-owned enterprises will be banned.

Third-party campaigners such as charities will not be prevented from receiving foreign gifts but won't be able to use foreign money for political spending.

Charities won't be prevented from using foreign donations to advocate for non-partisan issues.

The Greens opposed the legislation, calling for a ban on all corporate donations.

They say the foreign donations bill isn't a real attempt at cleaning up Australia's democracy.

"The big money that is pouring into our parliament from vested interests is a fungating cancer on our democracy," party leader Richard Di Natale said.

The draft laws will now be sent to the House of Representatives for approval, with the government aiming to pass them in the final sitting fortnight of the year which starts on November 26.

Australian Associated Press