The approval, by 283 votes to 155, comes after Indigenous groups blocked a highway and burned tires to protest the measures earlier on Tuesday.
Outside Sao Paulo, Brazil's largest city, demonstrators blocked a major motorway with flaming tires and used bows and arrows to confront police, who dispersed them with tear gas.
Indigenous groups from across the country planned a week of protests outside Congress in the capital Brasilia.
Lula legally recognized six Indigenous territories last month.
Reporting by Anthony Boadle in Brasilia and Leonardo Benassatto in Sao Paulo; Editing by Brad Haynes, Cynthia Osterman and Lincoln FeastOur Standards: The Thomson Reuters Trust Principles.
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