Unification of the two regional governments, one headed by the Kurdistan Democratic Party and the other by the Patriotic Union of Kurdistan, was unanimously approved by the 105-member parliament. The step created a joint 32-member Cabinet.
Kurds have enjoyed self-rule in three provinces of the north but under the separate administrations. The parliament move Sunday marks the final step in a plan for unification which gathered steam following the collapse of Saddam Hussein's rule in 2003.
Kurdistan's president, Massoud Barzani, in the session of parliament attended by the U.S. Ambassador to Iraq, said the unification of the two governments will help the Iraqi central government in its bid to realize political stability and security.
"The new government of Kurdistan is not only for the Kurds, but for the other sects and ethnic groups such as the Christians and Turkomen," said Barzani, who heads the KDP.
The unification of the two regional governments in the oil-rich north will likely give the Kurds more leverage in Baghdad and other parts of Iraq -- particularly in the Sunni Arab dominated central region -- where distrust of them runs rampant.
Sunni Arabs fear that Kurds are pushing for secession under the nation's new federal system, a step which, if imitated by the Shiite majority in the oil-rich south, would leave Sunnis with little more than date groves and sand.