The Senate voted almost unanimously to extend the sanctions, a week after the House took similar action. The bill now goes to President Barack Obama, who is expected to sign it despite his administration's engagement with Myanmar.
The law bans trade with companies tied to the junta in Myanmar, also known as Burma. It also freezes such firms' assets and instructs the United States to block international loans for the isolated state.
"The United States must deny this regime the legitimacy it so craves and await the day when the Burmese people will be permitted to govern their own affairs," said Mitch McConnell, the top Senate Republican and a sponsor of the bill.
McConnell and fellow senators voiced concern about Myanmar's elections planned later this year, which most opposition leaders intend to boycott as they fear they will be a sham to legitimize military rule.
Democracy icon Aung San Suu Kyi's National League for Democracy won the last election in 1990 but was never allowed to take power. The Nobel laureate has spent most of the ensuing two decades under house arrest.
The Obama administration last year launched a dialogue with Myanmar, concluding that isolating the regime had not worked. But it has said it will only lift sanctions in return for progress on democracy and other concerns.
Secretary of State Hillary Clinton, on a trip to Asia, voiced concerns about Myanmar's military cooperation with North Korea -- which a recent report by a defector said included work by the junta on a nuclear weapons program.
The Senate voted 99 to 1 to support sanctions, with Senator Mike Enzi, a Republican from Wyoming, casting the sole dissenting vote.
Coy Knobel, a spokesman for Enzi, said that the senator opposed sanctions if they come only from the United States and European Union and believed it was better to develop broader pressure on the regime.
"Burma is violating human rights, but the question is how best to get them to change that practice. If we could get more help from our allies in the region that would be more effective," he said.
China is the main military and diplomatic partner of Myanmar, which has trading relationships with many Asian nations.