The decision, which awaits a final nod from the parliament, raises concern about the rights of the Muslim minority in the country.
The government plans to transform Islamic schools into regular ones but opposition politicians say the move is an attack on Muslims.
The UN has expressed concern over "reports of intensified fighting" in northwest Rakhine state's Rathedaung township.
The attacks takes place just days after a deadly bombing at a Catholic cathedral and a vote backing self-rule in the Muslim-majority region.
Anti-Muslim violence in Sri Lanka is on the rise and feeding Buddhist nationalism. The government of Sri Lanka must take action before events spiral out of control.
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