In a bipartisan deal, the proposal was signed off by the House of Representatives on Friday following a late-night sitting of the Senate.
Facebook, Instagram, Snapchat, Reddit and X (formerly Twitter) will be the platforms captured under the ban.
Exemptions will apply for health and education services including YouTube, Messenger Kids, WhatsApp, Kids Helpline and Google Classroom.
The ban will come into effect in a year's time, as age verification technology trials are still being carried out.
Communications Minister Michelle Rowland ensured exemptions for health and education services. (Mick Tsikas/AAP PHOTOS)
Workplace Minister Murray Watt said the laws would help keep children safe.
"The important step that's now taken by the parliament is to set the age limit and give confidence to families and kids that they will be protected from the kind of online harm we see proliferating around the world," he told ABC TV on Friday.
"This is one of the challenging balances we've had to come up with because we do recognise that social media and online forms of communication do form a really important part of communication between many kids."
Opposition Leader Peter Dutton said the ban would be a relief to parents.
"It's something that most, most parents around the country would give a head nod to, because these big tech companies only see our kids as a profit-making venture," he told Nine's Today program.
"Hopefully we can keep young kids, young impressionable minds off Snapchat and other social media platforms."
Communications Minister Michelle Rowland has said social media users won't be forced to hand over government-issued IDs including passports to verify their age.
But it's unclear how age would be confirmed without identity verification, a parliamentary committee found.
Concerns have been raised by social media companies, individuals and human rights groups that the laws have been rushed through without proper scrutiny, with Australia the first country to implement such a ban.
The committee found while protecting children was a legitimate aim and the ban could be capable of that, it's not clear if the measures would be a proportionate limit on their rights.
Human rights groups and mental health services are opposed to a total ban, warning vulnerable children could be isolated from accessing support.
Improving safety would have been a better approach, they argued.
eSafety commissioner Julie Inman Grant has said while children need to be protected online, marginalised kids still need a way to connect with others.
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