The House voted 69-43 to agree with the Senate's changes and send the bill to Gov. Nikki Haley, whose spokesman confirmed she will sign it.
House Speaker Bobby Harrell noted South Carolina is the latest in a string of states to place similar requirements on law enforcement.
"If Washington refuses to effectively support our law enforcement officers by enforcing immigration laws, it is left up to the states to stand up and do what is right," said Harrell, R-Charleston. "That is exactly what South Carolina did today by making sure our officers have the enforcement tools they need during this time of federal indecision."
The bill expands on a 2008 South Carolina law which at the time was considered one of the nation's toughest crackdowns on illegal immigration.
It requires officers to call federal immigration officials if they suspect someone is in the country illegally. The question must follow an arrest or traffic stop for something else. The measure bars officers from holding someone solely on that suspicion.
Opponents argue the bill will encourage racial profiling and lead to lawsuits. Beyond the possibility of lawsuits by civil rights groups, the measure allows residents to sue local governments that bar or restrict officers from complying.
"We're setting up another avenue for racial profiling," said Rep. David Mack, D-North Charleston. "We're going to have situations of hard-working Americans of a certain color ... pulled over for no reason but they're brown. That's wrong."
The bill also makes it a felony for someone to make fake photo IDs for illegal residents – punishable by a $25,000 fine and five years in prison – and creates a new law enforcement unit within the Department of Public Safety to enforce state immigration laws.
Legislators' budget plan for 2011-12 designates $1.3 million toward the unit.
The American Civil Liberties Union is suing to block similar laws in Arizona, Utah, Indiana, and Georgia. It is planning to sue in Alabama and will sue in South Carolina too, should it become law, said Andre Segura, an ACLU attorney in New York.
"It's a definite throwback to the pre-civil rights era," he said. "It really strikes at the heart of American values and makes these states into 'show-me-your-papers' states."
He said a provision of South Carolina's law that makes it a felony for illegal immigrants to allow themselves to be transported is particularly harsh, by punishing people who could be the victims of trafficking.
"It impacts people who are incredibly vulnerable," he said.
Changes added last week by the Senate, meant to bring the state's 2008 law in line with a recent U.S. Supreme Court ruling on a separate Arizona law, were opposed by the state's small business chamber and tea party groups.
The amendment removed businesses' ability to use state drivers' licenses to check workers' citizenship, requiring all businesses to use the E-verify system.
Talbert Black, state coordinator for the Campaign for Liberty, said he likes the idea of ensuring that people are in the state legally.
"But we're in this mess because the federal government hasn't enforced federal immigration law, so what's our answer? We want to give the federal government complete authority over who's hired in this state, and I think that's a bad idea," he said.
The CEO of the small business chamber said the Republican leadership should be ashamed.
"We're burdening businesses with being the immigration police," said Frank Knapp, noting the changes were done on the Senate floor without a hearing. "They've made a change to impact every business in this state no matter how small, whether they have Internet access or not, with no public debate."