The Energy Charter Treaty was signed in 1994, after the end of the Cold War, to offer guarantees to investors in Eastern Europe and the former Soviet Union.
But the European Commission, the EU's executive arm, said in July it was necessary to withdraw from the treaty in a coordinated manner since it is "no longer compatible" with the bloc's "enhanced climate ambition".
During a parliament vote in Strasbourg, 560 lawmakers gave the green light for a withdrawal, while 43 voted against and 27 abstained. The exit will become official after the 27 EU states endorse the move.
Eleven EU states have already announced or completed their exit including France, Germany, Italy, the Netherlands and Poland.
But some countries -- such as Hungary, Malta and Slovakia -- want to remain members and support the "modernisation" of the treaty, and are free to do so.
The treaty allows companies to claim compensation via a private court from a country whose policies and laws affect their investments' profitability.
Even pro-climate policies are penalised under the treaty.
In 2022, a court ordered Italy to pay 200 million euros ($213 million) to British oil company Rockhopper for refusing to issue an offshore drilling permit.
The treaty, which the EU and Euratom, the European atomic energy community, signed onto came into effect in 1998 and currently has some 50 signatories.
It aimed to encourage greater cooperation between post-Soviet eastern European energy sectors with western European ones.
Europe's attempts to modernise the text failed, pushing many member states to withdraw at a national level.
Britain announced its exit in February.
The EU parliament's move is a "collective sign, a real political weight that strengthens our climate road map", said liberal lawmaker, Christophe Grudler, who spearheaded the push in parliament.
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