0648 GMT January 20, 2021
At least 32 people have been killed in violence that erupted after a disputed election on October 20, with protesters' blockades causing severe fuel and food shortages in La Paz and other cities, AFP reported.
Both houses voted in favor of the proposal after hours-long sessions. It will be sent to interim President Jeanine Anez.
Among other things, the bill annuls the results of the October 20 vote and allows for new elections to be held.
Crucially, it bars candidates who served in both of the two previous terms from seeking re-election for the same position. That would prevent Morales from contesting the presidency in the new ballot.
Congress also needs to agree on a new seven-member electoral court, after members of the previous panel were removed for allegedly manipulating results.
The tribunal will be tasked with setting a date for the new vote that Anez has previously vowed to hold "as soon as possible."
"I want to thank our parliamentarians for having understood and listened to the demands of the Bolivian people," Anez tweeted.
New elections are seen as key to ending Bolivia's worst political upheaval in 16 years, which has deepened divisions between indigenous people loyal to Morales and Bolivia's mainly city-dwelling middle and upper classes.
Morales' Movement for Socialism (MAS) party holds a majority in both houses of Congress, but is divided over the left-wing leader and his political future.
While some supporters would remain loyal to Morales, members of his party "will try to save MAS without Evo Morales in order to be an option in the next elections," Carlos Toranzo, a political analyst, told AFP.
Morales, who had been seeking a fourth term, said he won last month's election, but opposition groups claimed the vote count was rigged.
The Congress vote comes a day after the caretaker government filed a criminal complaint accusing Morales – Bolivia's first indigenous president who served for nearly 14 years – of "sedition and terrorism," after he allegedly called on supporters to maintain blockades.
His former top minister Juan Ramon Quintana, whose whereabouts are unknown, is also accused of the same crimes.
Morales, who says to have been a victim of a coup after losing the support of the security forces, tweeted Friday – several hours before Interior Minister Arturo Murillo referred the case to federal prosecutors – that the investigation was based on "planted evidence and manipulated recordings."