Brazil's Congress has approved a controversial forestry code reform that environmentalists say provides amnesty for illegal logging and opens up vast swathes of rainforest to agribusiness.

The bill, which would allow farming in areas illegally logged before July 2008, including along fragile river banks, will now go to President Dilma Rousseff for ratification after having been approved by the Senate in December.

"It grants amnesty to loggers and raises the risk of environmental disasters in major cities... Now it is important that the president veto it," opposition lawmaker Ricardo Tripoli said after the vote late Wednesday.

Agribusiness strongly supports the measure, insisting the land is needed to ensure food security in the emerging Latin American giant.

The initiative mandates the preservation of 80 percent of the Amazon rainforest, the world's largest.

Environmentalists opposed to the bill have warned it will embarrass the country ahead of its hosting of the Rio Summit in June, aimed at addressing global threats to the environment.

They marched along with small farmers outside the National Congress last month urging Rousseff to veto the changes to the country's forestry code.

The reform was initially intended as a bid to rein in unfettered logging and increase the protection of Brazil's sprawling forests, which play a key role in reducing greenhouse gases linked to climate change.

Brazil is considered the sixth largest emitter of greenhouse gases.

But farm-based economic interests prevailed, and the bill was reshaped to ease restrictions that have been in place since 1965 and are credited with curbing deforestation.

During her 2010 election campaign, Rousseff pledged to reject the legislation.

The proposed reform threatens 690,000 square kilometers (270,000 square miles) of vegetation, which would prevent Brazil from reaching its goal of reducing deforestation by 80 percent, according to the Climate Observatory, a network of 26 non-governmental organizations set up in 2002.