Germany's lower house of parliament voted overwhelmingly on Thursday in favour of a bailout for Cyprus.
Of the 602 lawmakers in the Bundestag who voted on the €10 billion rescue, 487 backed it, while 102 opposed it and 13 abstained.
Earlier, Finance Minister Wolfgang Schaeuble urged German lawmakers to approve the bailout, warning that Cyprus posed a systemic risk.
"Step by step we are winning back confidence. If you look at the markets, there is still nervousness and uncertainty. But it is considerably less that three years, two years or one year ago," Schaeuble said in his speech.
"The aid for Cyprus secures the successes we've already achieved in the eurozone. We must prevent the problems in Cyprus from unleashing new problems in other eurozone countries."
He added that if Cyprus were allowed to go bankrupt, there was a "significant risk" of contagion to Greece and other vulnerable eurozone member states.
Responding to Schaeuble, the leader of the centre-left Social Democrats in parliament Frank-Walter Steinmeier said his party would support the bailout, but attacked the government for initially backing a plan to hit small savers in Cypriot banks.
That proposal was scrapped after a major backlash and the new bailout only hits people with deposits over €100,000.
"Mr. Schaeuble, whether you asked for this or simply joined others in supporting it, it was a huge mistake. It stoked fear and insecurity in Europe," said Steinmeier.
German Chancellor Angela Merkel (C) casts her vote