The move has irked the Tel Aviv regime and its major ally Washington.
The Geneva-based council on Thursday adopted the resolution presented by Pakistan with 32 votes in favor, none against and 15, mostly European states, abstaining.
Pakistan argued that the Israel settlements in the West Bank, East al-Quds (Jerusalem) and the Golan Heights violate international law.
The council urged to keep updating the list of enterprises annually. It also asked for the list to be appraised of the "human rights and international law violations involved in the production of settlement goods."
Danny Danon, the Israeli ambassador to the UN, said the database was a "blacklist" accusing the UN body of behaving "obsessively" against Tel Aviv.
The measure was among nearly 40 resolutions adopted by the UN body at the end of its four-week session.
Israeli Prime Minister Benjamin Netanyahu also issued a statement on Thursday evening, calling the body an “anti-Israel circus.”
US Ambassador to the UN Keith Harper described the resolution as “especially disturbing,” adding it “only serves to reinforce the council's one-sided actions against Israel.”
Also on Thursday, the council named Canada’s Stanley Michael Lynk as its new investigator on the situation of human rights in the Palestinian territories.
Lynk replaced Makarim Wibisono as the UN special rapporteur, who resigned in January over Israel's failure to cooperate with him.
More than half a million Israelis live in over 230 illegal settlements built since the 1967 Israeli occupation of the Palestinian territories of the West Bank and East Jerusalem (al-Quds). The Israeli settlements are regarded as unlawful by the United Nations and most countries.
Palestinian state 'less possible'
The UN's top Mideast envoy Nickolay Mladenov told the Security Council Thursday that Israel's settlement expansion, confiscation of Palestinian land and its current wave of violence jeopardize the so-called two-state solution.
"The time has come to ring the alarm bells that the two-state solution is slipping from our fingers, that it is disappearing as the realities on the ground ... make the prospect of a viable and independent Palestinian state less possible and less likely," he said.
The results of a poll Wednesday revealed a sharp increase in anxiety among Israeli Arabs with 85 percent of them fearing the rise in attacks and racism against Arabs.
“There is great anxiety about the future. It is a warning sign that emphasizes the importance in stopping racism and a return to a path of living together,” Ghada Zoabi, the founder and CEO of the Israeli Arab news portal Bokra.net, said.
Tensions have heightened in the occupied territories since August 2015, when Israel imposed restrictions on the entry of Palestinian worshipers into the al-Aqsa Mosque compound in East al-Quds.
Over 200 Palestinians, including women and children, have lost their lives at the hands of Israeli forces since the beginning of last October.