The Bill creates new offences and increased penalties for the sale and supply of illegal tobacco and vaping products, and new powers to shut down businesses that sell illegal products.
Minister for Health, Mental Health and Wellbeing, Bridget Archer, welcomed the passing of the Bill through the House of Assembly.
"These illicit products undermine our efforts to reduce smoking and nicotine addiction, and they're often sold in ways that deliberately target teenagers.
"This Bill sends a clear message that the trade of illicit tobacco products will not be tolerated in our State, as part of our ongoing commitment to reduce smoking rates and protect young Tasmanians from harm.
"We are delivering for Tasmania by taking strong action to crack down on illegal cigarettes."
Minister for Police, Fire and Emergency Management, Felix Ellis, said the tougher powers send a strong message to criminal gangs.
"Illegal tobacco is fueling organised crime across Australia," Minister Ellis said.
"We will not allow the firebombings and intimidation tactics seen on the mainland to take hold in our State.
"I look forward to the Bill being considered by the Legislative Council in due
course."