The measure now heads to Gov. Richard J. Codey, who has indicated he will sign it before leaving office on Jan. 17.
Under the measure, a 13-member commission would have until November to report on whether the death penalty is fairly imposed and whether alternatives would ensure public safety and address the needs of victims' families.
New Jersey would become the third state behind Illinois and Maryland to suspend executions, but the first to do so through legislation. The others were done by executive order. Maryland has since lifted its suspension.
There are 10 prisoners on New Jersey's death row. While capital punishment was reinstated in the state in 1982, the last execution took place in 1963.
The Assembly passed the measure Monday, 55-21, with two abstentions. The Senate approved it 30-6 last month.
"By its action today, the Assembly joins the Senate in signaling deep concern that the state's death penalty system isn't working," said Celeste Fitzgerald, director of New Jerseyans for Alternatives to the Death Penalty. She said capital punishment is meted out unfairly and risks executing the innocent.
Sharon Hazard Johnson, whose parents were murdered in their home, accused lawmakers of "slowly murdering me and my siblings." She said capital punishment is justified "when it fits the crime."
The bill had bipartisan legislative support.
Joseph Roberts, a Democrat who is set to become Assembly speaker on Tuesday, said the legislation is overdue.
"The injustice of the current system, and the steep price tag of it as well, means we ought to take a look at it," Roberts said.
"In New Jersey, there has been a sea change in how people view the death penalty," said Sen. Diane Allen, a Republican who voted for the moratorium.
"We've heard about people who have been put to death and were then found to be innocent. We've looked at the cost, which is enormously more for someone on death row than for a person who's imprisoned for life without parole," Allen said.
New Jersey lawmakers are not alone in considering a study of executions. Concerned about wrongful convictions and whether the poor and minorities are more likely to receive the death penalty, at least 12 other states have appointed study commissions. Thirty-eight states allow people to be sentenced to death.