New Zealand, Malaysia, Senegal and Venezuela proposed the draft. Israel's strongest ally the United States abstained from the vote allowing it to pass.
The UN Security Council on Friday overwhelmingly adopted a historic resolution demanding an end to Israeli settlements on Palestinian land.
New Zealand, Malaysia, Senegal and Venezuela proposed the resolution. Israel's strongest ally, the United States abstained from the vote allowing it to pass by a vote of 14 in favour in the 15-member council.
Earlier on Thursday, the UN Security Council had postponed the vote. Egypt had requested the delay, one day after submitting the draft text to the council.
The move had triggered immediate calls from Israeli Prime Minister Benjamin Netanyahu for a US veto to block the resolution.
The Israeli Prime Minister's office has responded to the outcome by rejecting the vote and saying that they won't abide by its terms.
"Israel rejects this shameful anti-Israel resolution at the UN and will not abide by its terms," a statement from Prime Minister Benjamin Netanyahu's office said.
"The Obama administration not only failed to protect Israel against this gang-up at the UN, it colluded with it behind the scenes," it said.
Israeli Energy Minister Yuval Steinitz said the United States had abandoned Israel by abstaining from the vote.
US President-elect Donald Trump tweeted "As to the UN things will be different after Jan 20," in response to the vote.
But Palestinian officials welcomed the move.
"This is a day of victory for international law, a victory for civilised language and negotiation and a total rejection of extremist forces in Israel," Chief Palestinian Negotiator Saeb Erekat said.
A spokesperson for Palestinian President Mahmoud Abbas, Nabil Abu Rdainah described the resolution as a "big blow to Israeli policy."
TRT World has more details.