Supporters say the package is one of the largest industrial bills in US history and the biggest investment in scientific research that the country has seen in decades.
"I believe that this legislation will enable the United States to out-innovate, out-produce, and out-compete the world in the industries of the future," Senate majority leader and co-sponsor of the bill Chuck Schumer said on the Senate floor.
It authorises roughly $250bn (£176bn) in funding for technology research, semiconductor development and manufacturing as well as subsidies for robot makers and chipmakers amid a shortage of computer chips worldwide.
The bill includes a number of China specific provisions, including the prohibition of the social media app TikTok from being downloaded on government devices.
Chinese organisations engaged in US cyber attacks or theft of US intellectual property from US firms would face sanctions too, once the bill is passed.