"Anyone who wears a garment that hides the face in public will be punished with a fine," says the law, which was passed at the parliament on Thursday with 75 votes in favor and 30 against.
The law, proposed by the center-right government and supported by the Social Democrats and the far-right Danish People's Party, will take effect on August 1, Presstv Reported.
Under the new law, anyone who covers her face in public will have to pay $156 in fines and repeated violations will be fined up to $1560.
"I do not think there are many who wear the burqa here in Denmark. But if you do, you should be punished with a fine," Justice Minister Soren Pape Poulsen said in February.
Supporters of the law say the ban enables better integration of Muslim immigrants into Danish society, but Amnesty International slammed the legislation as a "discriminatory violation of women's rights."
"Whilst some specific restrictions on the wearing of full-face veils for the purposes of public safety may be legitimate, this blanket ban is neither necessary nor proportionate and violates the rights to freedom of expression and religion," the Amnesty's's Europe director Gauri van Gulik said in a statement on Thursday.
"If the intention of this law was to protect women's rights, it fails abjectly. Instead, the law criminalizes women for their choice of clothing and in so doing flies in the face of those freedoms Denmark purports to uphold," she added.
Wearing burqas has turned to be a thorny issue in some European countries as several governments have moved to ban it under increasing pressure from anti-Muslim and anti-immigrant political parties.
France and Belgium have imposed restrictions on the use of burqas in public. Norway, which has seen a surge in anti-immigrant feelings over the past years, has also banned the dress in classrooms and university lecture halls.