A debut sukuk from Hong Kong would help boost its Islamic finance credentials and position itself as a gateway between mainland China and investors in the Gulf and Southeast Asia.
The Legislative Council's bills committee confirmed the bill was passed in an email response to Reuters.
As of February, the programme had 14 listed bonds currently outstanding worth a combined HK$94 billion, with tenors of up to 10 years.
Hong Kong's sukuk plan comes at a time of increasing competition among financial centres for a slice of Islamic finance business, which is centred in southeast Asia and the Middle East.
A $500 million sukuk issue would be larger than debut sovereign issues planned by Luxembourg and Britain, which are at different stages of development.
Legal filings describe the proposed sukuk issuance as "inaugural", suggesting it would not be a one-off like Britain's plan for a 200 million pound ($333 million) sukuk issue.
Sukuk proceeds would be placed with the territory's Exchange Fund, which is managed by the Hong Kong Monetary Authority.