A majority of parties in parliament said the blasphemy law was no longer relevant in the 21st Century.
The legislation, introduced in the 1930s, has not been invoked in the last half century.
However, it still remains illegal under Dutch law to be disrespectful to police officers or to insult Queen Beatrix, the country's monarch.
Freedom of speech is a much-cherished right in the liberal and traditionally tolerant Netherlands.
The BBC's Anna Holligan, in The Hague, says that there was much debate about the issue after a Dutch court ruled that the far-right anti-Islam politician Geert Wilders should be allowed to criticise Islam, even if his outspoken opinions offended many Muslims.
In 2008, a coalition government decided against repealing the blasphemy law in order to maintain support from a conservative Christian political party.