The deal could apply from as early as April 2017, the Parliament said.
CETA will remove tariffs on many goods and services traded between Canada and the EU and will allow mutual recognition of certification for a range of products, the Parliament said.
Artis Pabriks, rapporteur for the agreement said: "By adopting CETA, we chose openness and growth and high standards over protectionism and stagnation. Canada is a country with whom we share common values and an ally we can rely on. Together we can build bridges, instead of a wall, for the prosperity of our citizens. CETA will be a lighthouse for future trade deals all over the world."
The EU has secured protection for over 140 European geographical indications for food and drinks sold on the Canadian market.
In response to concerns that the deal gives too much power to multinational companies, the EU and Canada "recognise in both the preamble to the deal and an attached joint declaration that its provisions apply without prejudice to the domestic right to regulate", the Parliament said.
The deal does not remove tariff barriers in public services, audiovisual and transport services and some agricultural products, it said.
The Parliament voted by 408-254 votes to support the Comprehensive Economic and Trade Agreement (CETA) deal, with 33 abstentions.
The European Commission welcomed the Parliament's support of the deal, and said that it will save EU businesses over €500 million a year currently paid in tariffs on goods that are exported to Canada.
"The agreement will overwhelmingly benefit smaller companies who can least afford the cost of red tape. Small businesses will save time and money, for example by avoiding duplicative testing requirements, lengthy customs procedures and costly legal fees," it said.
Commission president Jean-Claude Juncker said: "Today's vote by the European Parliament is an important milestone in the democratic process of ratification of the agreement reached with Canada and it also allows for its provisional entry into force. As a result, EU companies and citizens will start to reap the benefits that the agreement offers as soon as possible. This trade deal has been subject to an in-depth parliamentary scrutiny which reflects the increased interest of citizens in trade policy. The intense exchanges on CETA throughout this process are testimony to the democratic nature of European decision making."
As CETA was declared a mixed agreement by the European Commission in July 2016, it will also need to be ratified by national and regional parliaments.
Juncker called on "all member states to conduct an inclusive and thorough discussion at national level with the relevant stakeholders in the context of the national ratification process of the agreement".
Canada's finance minister said in November that his country will want to strike a deal with the UK after it leaves the EU, but that it is not top of Canada's trade priorities.