The Overseas Operations Bill has been approved by 331 votes to 77 in Parliament by MPs and will undergo further scrutiny at a later date.
The bill was introduced in March, after operations in Iraq and Afghanistan gave rise to an unprecedented number of legal claims.
Nearly 1,000 compensation claims were made against the Ministry of Defence (MOD) for unlawful detention, injury and death.
A further 1,400 judicial review claims seeking investigations and compensation for human rights violations were also made against the MOD.
Around 70% of the allegations that were received by the independent Iraq Historic Allegations Team were dismissed as there was no case to answer.
A key aim of the Overseas Operations Bill is to limit false and historical allegations against service personnel and veterans in relation to overseas operations.
While not an absolute ban on historic prosecutions, the bill would make it exceptional for serving personnel and veterans to be prosecuted five years or more after an incident that took place during overseas operations.
When coming to a prosecution decision, an independent prosecutor must weigh up the adverse impact of overseas operations on service personnel and, where there has been a previous investigation and no compelling new evidence, the public interest in cases coming to a timely conclusion.
If a decision is made to go forward to prosecution, the consent of the Attorney General will be required.
The bill also delivers an amendment to the Human Rights Act in law, limiting the time in which claims for human rights violations can be brought to six years after an alleged incident.
The Government says personnel and veterans will not be prevented from bringing claims against the Ministry of Defence, adding that the majority of these claims are already brought within six years, and that the time limit for claiming over specific conditions, such as post-traumatic stress disorder (PTSD), will start from the date of knowledge of the condition.
All overseas operations will continue to be governed by international humanitarian law, including the Geneva Conventions.
Separate legislation will be introduced by the Government to address the legacy of the past in Northern Ireland.
Prior to Wednesday's vote in the House of Commons, Forces News spoke to Joshua Rozenburg, solicitor and legal commentator, to talk us through what the Overseas Operations Bill is.
What is the current law on the historical prosecution of veterans?
"I don’t think there is very much law on this subject at all. There’s no time limit, there’s no statute of limitations. Military personnel are subject to military law of course [and] they must also observe the laws of wherever they’re serving.
"And that’s why we’ve seen Army veterans facing charges in Northern Ireland under the ordinary criminal law that applies there."
How would the Overseas Operations Bill change that?
"One of the things it does is to introduce a presumption against a prosecution for an offence committed during an overseas operation more than five years earlier.
"It's not an absolute ban on historic prosecutions but any charges brought after five years will be exceptional.
"The prosecutor, either a civilian prosecutor or a service prosecutor, will have to give particular weight to what you might describe as mitigating factors, so the adverse effects that overseas operations are likely to have had on the ability of a service person or a veteran to make sound judgements, or to exercise self-control, or the effect on their mental health.
"Prosecutors must also consider the public interest in what’s called finality, in drawing a line under an incident where there’s already been a previous investigation and no compelling new evidence has emerged.
"And, as a final safeguard, particularly for England and Wales, the Attorney General will have to give her or his consent to any prosecution."
Does it have any impact on those who served in Northern Ireland?
"The answer to that is no, because first of all it applies only to overseas operations, it applies only to operations outside the British Isles, and secondly the five-year presumption that we’ve been talking about is not going to be retrospective, so it won’t have any effect on existing cases.
"Charges can still be brought until the new law takes effect and that won’t be before 2021, next year, at the earliest."
Is there a risk some cases which should be prosecuted won’t be?
"Well, that really is a matter of opinion, isn't it? The Labour Party says that the bill creates the risk that serious violations could go unpunished if an incident does not come to light for five years, or if investigations are drawn out beyond that deadline.
"Campaign groups say that by restricting prosecutions, the bill will effectively decriminalise torture and war crimes.
"It will still be possible to bring prosecutions for offences against other service personnel and sexual offences, including war crimes and crimes against humanity of a sexual nature, five or more years after an alleged incident takes place," Mr Rozenberg added.
"The Government says it’s very important to get this bill on the statute book.
"It says that putting it on hold would leave British service personnel vulnerable to what it calls 'vexatious prosecutions'."
How does UK law on military prosecutions compare with other countries?
"One of the reasons that the Government has introduced this bill is that the European Court of Human Rights has said that human rights law applies to overseas military operations, so that would apply to all 47 European countries that have signed up to the European Human Rights convention.
"But maybe some of those countries are more willing than others to respect the convention. It’s a very broad range of countries that are members of the council of Europe.
"All democratic countries must have systems of military law but, again, I’m sure that across different parts of the world, standards must vary."
Cover image: PA.