Critics at home and abroad have condemned the "anti-coronavirus defence law", saying it gives Orban unnecessary and unlimited power and is a means of cementing his position rather than battling the virus.
After declaring a state of emergency on March 11, the new law gives Orban the power to indefinitely rule by decree until the government decides the emergency is over.
It removes the current requirement for MPs to approve any extensions to decrees. Elections cannot be held either during the emergency period.
It also introduces jail terms of up to five years for anyone spreading "falsehoods" about the virus or the measures against it, stoking worries for press freedom.
The measures come into effect as of midnight on Monday.
The parliament, where Orban's Fidesz party enjoys a dominant two-thirds majority, passed the bill by 137 votes to 53.