Labour has voted to fully adopt the international definition and examples of antisemitism but has been criticised for adding a free-speech clause.
Members of the party's National Executive Committee backed a change in its code of conduct to help it investigate, suspend and expel members accused of discrimination against Jewish people.
The vote marks a crucial moment in a row that has dominated Labour all summer, pitting MPs against each other and seeing serious allegations levelled at Jeremy Corbyn.
A spokesperson said the NEC had adopted "all of the IHRA examples of antisemitism, in addition to the IHRA definition which Labour adopted in 2016, alongside a statement which ensures this will not in any way undermine freedom of expression on Israel or the rights of Palestinians.
"The NEC welcomed Jeremy Corbyn's statement to the meeting about action against antisemitism, solidarity with the Jewish community and protection of Palestinian rights, as an important contribution to the consultation on Labour's code of conduct."
The president of the Board of Deputies of British Jews welcomed Labour's decision as the "right call" but said it was "very long overdue".
Marie van der Zyl said adopting the definition was only the beginning.
"We need to see firm action taken against antisemites and those who bring the party in to disrepute by denying the problem of antisemitism," she said.
"Labour must resolve the outstanding cases; introduce greater transparency to the disciplinary process; tackle the culture of the problem of antisemitism and introduce education and training.
"In addition, Jeremy Corbyn needs to apologise for past antisemitic comments and affiliations."
Labour Friends of Israel (LFI) was one of the groups to condemn the freedom of expression clause.
Its director, Jennifer Gerber, said it was "unnecessary and totally undermines the other examples the party has supposedly just adopted".
Labour Against Antisemitism said the move "appears to be about protecting the freedom of racists to present vile views".
Conservative Party chairman Brandon Lewis claimed that adding "caveats" to the definition "exposes Jeremy Corbyn's continued unwillingness to take a firm stand against anti-Jewish racism".
The long-running row over antisemitism has seen backbencher Frank Field resign the whip, fellow senior MP Margaret Hodge threaten legal action and former chief rabbi Lord Sacks compare the Labour leader to Enoch Powell.
The dispute centred over calls for Labour to adopt the International Holocaust Remembrance Alliance's (IHRA) examples of antisemitism word-for-word.
The party had already incorporated the IHRA definition, which says: "Antisemitism is a certain perception of Jews, which may be expressed as hatred toward Jews.
"Rhetorical and physical manifestations of antisemitism are directed toward Jewish or non-Jewish individuals and/or their property, toward Jewish community institutions and religious facilities."
Labour also included seven of the IHRA's 11 definitions of antisemitism.
However, the party reworded one saying that denying Jewish people the right to self-determination was antisemitic.
It also described behaviour in two other definitions - accusing Jewish citizens of being more loyal to Israel and applying double standards for condemnations of other Jewish people or institutions - as "wrong".
And it told Labour members to "resist the use of Hitler, Nazi and Holocaust metaphors, distortions and comparisons".
Critics argued it was not as strong as the IHRA examples.
The decision on Tuesday was to adopt the IHRA definition and examples unedited and in full - and to add the statement protecting freedom of expression.
Labour sources at the meeting said Mr Corbyn had spoken to the NEC about "eradicating the social cancer of antisemitism".
He said the adoption of the full IHRA text and examples was part of the process of "rebuilding trust and as an act of solidarity with Jewish communities".
But the Labour leader said clarifications were needed to ensure the rights of Palestinians or their supporters were not undermined.
Protesters on both sides demonstrated outside Labour's headquarters ahead of the vote.
A group draped in Israeli flags held a sign that read: "Corbyn/Milne [his head of communications]... off our lawn! What offends Jews is our business - not yours!"
Elsewhere, people were seen holding Momentum banners and a placard that read "it's the Palestinians who are suffering" - with one man dressed in a witch's hat.
The decision to add a "free-speech clause" will also anger many Labour MPs, many of whom were already alarmed by the re-election to the NEC of Peter Willsman.
Mr Willsman was caught on tape in July claiming that Jewish "Trump fanatics" were making up antisemitism allegations.