The amendment to the penal code, which will go into force after being ratified by the president, also raises the age of criminal responsibility from seven to 10 years of age.
Under the revised legislation, sexual assaults will now be punishable by up to seven years in prison. Previously, only rape was criminalized.
Likewise, child pornography, which was previously not mentioned in the law, will be be punishable by seven years in prison and a fine of 700,000 rupees ($7000).
Pakistan last August was rocked by a major paedophilia scandal when it was revealed that hundreds of pornographic videos of children from the village of Hussain Khanwala in Punjab province had been created and were being circulated.
About 20 arrests were made, but only the acts of rape and sodomy were punishable by law.
The new amendment also criminalizes child trafficking within Pakistan. Previously traffickers were only liable for punishment if they removed children from the country.
“This is a very important step to realize the obligations of Pakistan” under the Convention on the Rights of the Child, Sara Coleman, chief of child protection at UNICEF, told AFP.
“Now we have to turn our attention to the law’s implementation,” said Valerie Khan, the director of Group Development Pakistan, a local NGO which advocates legal reforms.
She also called for the “establishment of a national commission on child rights, which is essential to monitor and coordinate the implementation of the law.”