The legislation is among the least restrictive of about three dozen measures lawmakers proposed on eminent domain and prohibits the taking of property for private development
The measure was approved by the senate earlier this month and now moves on to the governor for his consideration.
The measure follows last year's US Supreme Court ruling to give a Connecticut city the authority to seize property for a private development project.
Governments have long purchased private property for the construction of roads, bridges, dams, sewer lines and other public projects.
If owners are unwilling to sell, governments can use eminent domain to force sale of the property.
One main provision of Tennessee's legislation would require local governments to certify the "public purpose and necessity" of seizing land.