The sweeping legislation authorizes spending for the nation's defense, from construction of ships, planes and war-fighting equipment to a 1 percent pay raise for the troops, while maintaining the prohibition on transferring terror suspects from the federal prison at Guantanamo Bay, Cuba, to the United States.
The House is expected to vote today and send the measure to the Senate, where Republicans are divided over the inclusion of unrelated provisions expanding wilderness areas in the West.
Proponents of the measure hope to finish the bill next week and send it to Obama for his signature.
In one of the rare instances of bipartisanship, Congress has passed the defense policy bill for 52 consecutive years.
The overall legislation endorses Obama's latest request to Congress in the 4-month-old war against Islamic State militants who brutally rule large sections of Iraq and Syria.
Obama sought billions for the stepped-up operation and the dispatch of up to 1,500 more American troops; the bill provides USD 5 billion.
The administration also pressed for reauthorization of its plan to train and equip moderate Syrian rebels battling the forces of President Bashar Assad, with that mandate expiring December 11. The legislation would extend that authority for two years.
Some in Congress have pressed for a new vote for authorising the use of military force to no avail. Democratic Rep Chris Van Hollen warned that US "not get dragged into Iraq war 2.0."
The bill would provide the core funding of USD 521.3 billion for the military and USD 63.7 billion for overseas operations in Afghanistan and Iraq, where fighting has lasted more than a decade.