MPs voted 283 to 163, with majority 120.
The Government says its proposal will legally require water firms to make a “progressive reduction” in dumping raw sewage into waterways.
But critics say the move does not require water companies to take action quickly enough, allowing dumping to continue for years to come.
The Government’s amendment replaces a previous proposal from the Duke of Wellington which would have placed a new legal duty on water companies to “take all reasonable steps” to prevent sewage discharges.
Conservative backbencher Kelly Tolhurst said the Government’s proposed amendments to the Environment Bill were a “major step” towards ending the use of storm overflows to pump sewage into rivers after supporting the Lords amendment attempting to end the practice.
The Rochester and Strood MP told the Commons: “There is no doubt that water companies pumping sewage into our waterways in 2021 is disgusting. So two weeks ago I did support the Duke of Wellington’s amendment and that was because I wanted the Government to go as far as they practically could go in regards to stopping this practice.
“I will be supporting the Government today because I believe that this new duty combined with the other measures that are in the Environment Bill is a major step to ending the use of storm overflows in the future.”
Liberal Democrat MP Tim Farron said: “There are no targets in terms of volume or in terms of timescale, in which case that leaves water companies with the power to continue what they do now. This is something to get Conservative backbenchers off the hook rather than to give water companies the direction that they need.”
The Westmorland and Lonsdale MP added: “I am disgusted that there is raw sewage being dumped into Lake Windermere on 71 days consecutively in any given year.
“This will do nothing to stop that. Currently the water company dumps 40% of all the phosphates in Windermere. If this goes down to 39% there is no measure to say that is OK or not, so I assume that the water companies will think that it is OK.”