© Agence France-Press Photo / Saul LoebUS President Barack Obama speaks about the government shutdown and debt ceiling standoff in the Brady Press Briefing Room of the White House in Washington, DC, October 16, 2013
The legislation funds the government through January 15 and lifts the $16.7 trillion debt ceiling through February 7.
As promised, Obama signed the legislation shortly after it was passed in the House of Representatives.
As indicated before the US Senate vote, Republican House Speaker John Boehner did not block the fiscal deal from moving on, and it passed by a vote of 285-144 in the lower chamber.
The measure was supported by every Democratic member of the House, but was rejected by a sizeable portion of Boehner's GOP caucus.
Conservative Republicans were nearly unanimous in their opposition to the plan, as the federal health care law - the Affordable Care Act, or Obamacare - they so object to will go virtually unscathed after all.
The Senate approved the proposal by a vote of 81-18 on Wednesday evening.
Republicans Sens. Ted Cruz, Rand Paul and Marco Rubio were among the 18 'nay' votes in the Senate.
President Obama said in a statement after the Senate vote that Washington must begin to gain back the trust of voters given that more confrontations on debt, governmental budgeting, and other issues await.
"Hopefully next time, it won't be in the eleventh hour. We've got to get out of the habit of governing by crisis," Obama said, who will deliver another statement Thursday morning on future negotiations between the two parties.
The US Treasury's authority to borrow money to pay down US debt obligations is scheduled to end Thursday, October 17. With no full spending bill from Congress, many government operations have been on hold since October 1.
Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell spent previous days constructing a deal as the House failed to come to an agreement on a proposal Tuesday.
"This compromise we reached will provide our economy with the stability it desperately needs. It's never easy for two sides to reach consensus. It's really hard, sometimes harder than others. This time was really hard," Reid said ahead of the vote. "The country came to the brink of a disaster. But in the end, political adversaries set aside their differences and disagreement to prevent that disaster."
"The eyes of the world have been on Washington all this week, and that is a gross understatement. And while they witnessed a great deal of political discourse, today they will also see Congress reaching a historic, bipartisan agreement."
© Agence France-Press Photo / Win McNameeSenate Majority Leader Sen. Harry Reid (D-NV) speaks to the media as U.S. Sen. Charles Schumer (D-NY) (L) and Sen. Patty Murray (D-WA) (R) look on, after the Senate reached a deal to end the government shutdown at the U.S. Capitol October 16, 2013 in Washington, DC
"Blocking the bipartisan agreement reached today by the members of the Senate will not be a tactic for us," Boehner said in a statement.
The White House has expressed support for the Senate deal as well.
"The president applauds Leader Reid and Minority Leader McConnell for working together to forge this compromise and encourages the Congress to act swiftly to end this shutdown and protect the full faith and credit of the United States of America," press secretary Jay Carney said ahead of the Senate vote.
The 16-day government shutdown has cost the US $1.7 billion per week in lost economic output, according to a study by IHS Global Insight, a Massachusetts-based research firm. The S&P ratings agency declared Wednesday the shutdown has subtracted $24 billion from the US economy, cutting 0.6 percent from the fourth quarter GDP growth.
Major US creditors like China - which holds $1.3 trillion in US Treasuries - have openly discussed "de-Americanizing" as the crises-hopping US government has become increasingly volatile to the world economy. China has introduced a so-called "haircut," or a discount, on the value of US Treasuries held as collateral against futures trades.
© BuzzFeed
Upon news of a deal, the Dow Jones Industrial Average shot up by more than 200 points.
"Investors are relieved that it looks like we're not going to go over the cliff," Ben Hart, a research analyst at the Pennsylvania-based Haverford Trust Co., told Bloomberg News. "It takes the worst case scenario off the table."
The Senate deal will provide back pay to furloughed government workers and will allow the US Treasury to pay US debt bills should Congress not come to an agreement on the ceiling by February 7.
In addition, the deal comes with an income verification requirement for anyone receiving health insurance subsidies under the Affordable Care Act.
For a minute or two there I thought we were in big trouble. So glad our trusted servants saved us from themselves, at least for a couple more months. It's a mockery, buffoonery of the highest order, played out by well compensated circus performers. P.T. Barnum would be proud.