The Paraguayan Congress on Thursday approved the expropriation of 52,000 hectares (128,000 acres) of a large tract of land owned by a company representing the interests of South Korean religious leader and business magnate Rev. Sun Myung Moon.
The authorization, which had already been approved in August by the Senate, will now be sent to President Nicanor Duarte for his signature.
Aristides Da Rosa, of the governing Colorado Party, said that the lower house's decision coincides with the stance taken by Duarte, who publicly urged legislators from his party to support the expropriation as part of agrarian reform.
"The government is giving a clear signal that it will recover the lands of the Chaco region for residents there and, more than ever, it has made this expropriation bill its own," said Da Rosa.
He added that the move will benefit thousands of families who currently have no way to make a living, and he rejected an alternative proposal presented on Wednesday by Moon's firm.
The expropriation initiative was pushed by a group of residents of Puerto Casado, which lies within the approximately 600,000 hectares (1.5 million acres) that Moon's Unification Church owns in northern Paraguay's Chaco province.
Victoria S.A., a firm owned by followers of Moon, bought the 1.5 million acres in 2000 from the Argentine firm Carlos Casado, which in 1886 possessed all of the Paraguayan Chaco region, an expanse larger than Switzerland.
The Puerto Casado affair has highlighted the more general problem of land distribution in Paraguay.
According to official data from 2003, two-thirds of Paraguay's land is owned by just 10 percent of the population, which also commands 40 percent of total income in the country.
Thirty percent of the nation's 5.8 million inhabitants have no land of their own.