Athens has pushed two reform packages through parliament
The legislation passed with 230 votes in the 300-seat chamber.
An International Monetary Fund study published on Tuesday showed that Greece needs far more debt relief than European governments have been willing to contemplate so far, as fractious parties in Athens prepared to vote on a sweeping austerity package demanded by their lenders.
Tough conditions imposed by global lenders could cause an outcry.
Athens bowed to demands to phase out tax breaks for its islands.
A year ago, Greece's bankers thought they were on the cusp of a new era.
The situation in Greece worsened with banks closed for a 2nd week.
Without some firmer pledge of debt relief, neither Greece nor the IMF is likely to accept a deal
Greek Finance Minister Yanis Varoufakis announced his resignation on Monday, a day after Greeks delivered a resounding 'No' to the conditions of a rescue package.
The vote leaves Greece in uncharted waters: risking a banking collapse that could force it out of the euro.
IMF report says billions more cash and debt relief needed
11th-hour debt restructuring programme offered no concessions to creditors
The proposals appeared so far apart that success seemed higly unlikely
EU authorities made a last-minute offer to salvage a bailout deal that could keep Greece in the euro as the clock ticked down on Tuesday, with Germany warning that time had run out to extend vital credit lines to Athens.
Greek proposals hailed as "a positive step forward".