Under the terms of the new laws, the Catalan Parliament will declare independence within 48 hours of a "yes" vote.
Lawmakers are confident the orders will be accepted due to pro-independence parties having a majority representation in the regional parliament, Reuters reported. Eleven lawmakers abstained from voting, but 52 opposition members of parliament walked out in protest.
Head of the regional government Carles Puigdemont told reporters there would be no "minimum turnout requirement to make the result of the vote binding". The source asked not to be named in line with internal protocols.
If the region pushes through with the referendum, it will move even further on its path towards a collision course with the national government, which has repeatedly argued that any attempt to break away from Spain is illegal and will not be recognised.
The Spanish Prime Minister requested the Constitutional Court to recognize the discussions by Catalan lawmakers the law on a referendum illegal. From now on, bills are adopted directly by Catalonia's parliament and only on their first reading. The vote had not appeared on the day's agenda until the very last minute.
Deputy Prime Minister Soraya Sáenz de Santamaría condemned the Catalan leadership for carrying out "an act of force" and for acting more like "dictatorial regimes than a democracy".
"What we have lived today in Catalonia is the trampling of democracy, the trampling of Catalans, the trampling of political decency", she added during a hastily called press conference. The Socialist leader had a scheduled meeting with the conservative prime minister on Thursday.
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Catalonia is a prosperous region in northeastern Spain that already enjoys ample self-government.
Both Catalan and Spanish are spoken in the region of 7.5 million people, and many Catalans feel strongly about their cultural heritage and traditions.
Caroline Gray, an expert on Spanish independence movements at Britain's Aston University said Madrid could have defused the rising separatist tide had it offered Catalonia a new financing deal a few years ago.
Similar to the Kurdistan Region's aspirations of independence from Iraq, the majority of Catalans want to exercise their right to vote on whether to split from Spain.
But a referendum in defiance of Spain's rule of law, without the blessing of central authorities, has inflamed controversy.
Among the officials ordered to repay the 5.1 million euros ($6.1 million) is Puigdemont's predecessor, former regional chief Artur Mas.
"They knew that I was not going to authorize it (the referendum) because I was neither able to, nor did I want to, but they didn't care about that", Rajoy said.