The Greek parliament voted to adopt a law providing for the dismissal of 15,000 civil servants as part of austerity measures imposed by the country's international creditors.
After heated debate during an emergency session, 168 deputies voted for the bill, with 123 voting against and one abstaining as the opposition proved powerless to stop cuts the government insisted were needed to keep the country afloat.
The new law overturns what had been a guarantee of a job for life for workers in Greece's notoriously bloated civil service.
Around 800 people turned up outside the parliament to protest against the measure in a demonstration called by trade unions.
The bill provides for the dismissal of 15,000 civil servants by the end of 2014, including 4,000 this year, to meet terms set by Athens's creditors for billions in bailout loans.
Civil service trade confederation Adedy condemned what it called the "politicians who are dismantling the public service and destroying the welfare state".
Private union GSEE said the bill would only worsen Greece's dire unemployment rate, which currently stands at 27 percent.
Slashing an unwieldy public service is a condition set by Greece's so-called "troika" of creditors -- the International Monetary Fund, European Union and European Central Bank -- to unlock loans of 8.8 billion euros ($11.5 billion).
The EU and IMF have committed a total of 240 billion euros in rescue loans since 2010, with the heavily indebted country obliged to pursue austerity measures in exchange for the international aid it needs to avoid bankruptcy.
The new law will speed dismissal procedures, which previously made it impossible to sack civil servants and saw the public sector swell over the years as every new administration brought in its own people.
Employees who have been disciplined for corruption or incompetence and those working for one of dozens of shuttered government agencies will be the main targets.
The law, which was written in a single article to force lawmakers to adopt all its provisions together, also extends weekly working hours for teachers, opens a number of professions to competition and reduces a controversial property tax by 15 percent.
Another section creates new payment terms for unpaid taxes, intended to help the government recover billions of euros owed by indebted companies and households.
The main opposition, radical leftist party Syriza, tried unsuccessfully to block the use of an emergency session to adopt the law, which it argued was unconstitutional.
Finance Minister Yannis Stournaras said the emergency session was necessary because his eurozone counterparts "must come to a decision Monday on continuing loan disbursements... that Greece needs to pay salaries and pensions".
Opposition parties also condemned what they said was a last-minute amendment introduced by Stournaras slashing the monthly minimum salary from 580 euros to 490 euros.