The highly disputed legislation will make it more difficult than ever before to start a new congregation. It passed by a two thirds majority.
Government officials say the law will make it easier for Christians to build new churches. Often their applications are rejected and they face violence from their Muslims neighbours.
Supporters of the legislation say it will provide a process and the option of an appeal which will be overseen by senior officials.
Critics argue it enshrines inequality in law because the same rules do not apply to mosques.
The Coptic Orthodox Church, to which most Egyptian Christians belong, had initially opposed the bill but backed it in the end.
The law means applications must be made to the provincial governor and the size of the proposed church should be "appropriate" to the number of Christians in the area.
Governors must take into account "the preservation of security and public order" before making a decision, the law says.
Christian lawmaker, Nadia Henary, is quoted by ABC News saying the law is flawed "but we have to respect the opinion of the majority."
Bishop Angaelos, General Bishop of the Coptic Orthodox Church, told Premier's News Hour he was concerned about the vote as well.
He said: "A significant number of the member of the Egyptian parliament actually either voted against or abstained, just for the fact that it was about Christian churches being built.
"In a country that is supposed to be perusing democracy and equality, that's quite alarming."
He said Christians in Egypt are concerned as the decision is up to individual governors.
"It's very discretional, although what we are hoping is that it becomes a code, as we're used to here in Britain and in many other countries, where there is a development code, a building code, and as long as you adhere to the requirements, things should go ahead," he said.
Before this law Bishop Angaelos said that it was equally as difficult to build a church.
He said: "The requirement to build any church needed a presidential decree, directly from the president, which was very difficult to ascertain.
"Then the security services would get involved and they'd be an allegation that this would lead to civil unrest."
Listen to Premier's Antony Bushfield speak to Bishop Angaelos here:
