The law, approved in its final reading late Monday, was supported by the right-wing and centrist parties, while facing harsh criticism from human rights groups and left-wing parties. It allows the Interior Ministry to decide if boycott activists will be granted visas or residency permits.
"The most natural instinct, the most normal instinct of a normal man that loves those who love him and hates those who hate him, is to not turn the other cheek," said co-sponsor Bezalel Smotrich from the right-wing Jewish Home party, speaking during the Knesset debate about the bill.
"There is no reason in the world that someone who calls for a boycott on Israel should be allowed into the country to use our infrastructure as a basis to undermine us."
The law is intended as a measure to combat the international Boycott, Divestment, and Sanctions (BDS) movement in Israel.
Prime Minister Benjamin Netanyahu has made defeating BDS a priority of his administration. Last summer, in a meeting with the Ministry of Foreign Affairs, Netanyahu declared that the BDS movement had been "beaten."
"Every country has the right to determine who enters its borders," said Minister of Strategic Affairs Gilad Erdan, speaking at conference on Tuesday.
"The law adopted yesterday to prevent the entrance of BDS activists into Israel is another step in our struggle against those who seek to delegitimize Israel while hiding behind the language of human rights."
Critics slammed the law as an attack on free speech and warned that it would lead to deterioration of Israel's standing in the international community.
"This law violates the most basic tenets of democracy by making political opinions a consideration that may prevent non-citizens from entering Israel and the Occupied Palestinian Territory (OPT)," read a joint statement from two human rights groups, Adalah and the Association for Civil Rights in Israel (ACRI).
"Those seeking to enter the country most certainly need not align their political positions with those of the current Israeli government in regards to the occupation."
Leaders of the BDS movement predicted the law would have the opposite effect, providing a tailwind to boycott efforts.
"This desperate and draconian law removes the already worn mask off the face of Israel's regime of occupation, colonialism and apartheid," said Omar Barghouti, co-founder of the BDS movement.
"Human rights defenders worldwide who support Palestinian freedom, justice and equality through BDS will clearly not stop their activism if denied entry; if anything, they will have even more motive to intensify it."
In February, Israel denied a work visa to Omar Shakir, the director of Israel and Palestine for Human Rights Watch (HRW), because of what the Ministry of Foreign Affairs called "the hostile, extremist, and anti-Israel agenda of the organization."
Shakir was later allowed into Israel and was permitted to appeal the denial of his work visa.
"This decision and the spurious rationale should worry anyone concerned about Israel's commitment to basic democratic values," said Iain Levine, Human Rights Watch's deputy executive director, in a statement.
Last July, the Knesset passed a law requiring any NGOs that receive more than 50% of their financing from overseas
to disclose the sources of their funding. Critics say the law targeted human rights organizations that oppose Israel's occupation of the West Bank and its treatment of Palestinian. The law's supporters say it prevents foreign meddling in Israel's affairs.