The measure is aimed at allowing research on so-called stem cells - the unprogrammed master cells found in early stage embryos that can turn into nearly every cell type in the body. Like all other embryos used in research, the clones created under the new regulations would have to be destroyed after 14 days, and the creation of babies by cloning would remain outlawed.
The change passed late Monday after an amendment that would have delayed it was defeated. The new regulations take effect Jan. 31.
Before the measure won approval, an impassioned debate on the topic ran on into the night.
Many lords said they were concerned that ethical worries were being sidelined in the rush to be at the forefront of medical research. They proposed an amendment that would have withheld approval of the government's proposal until after the ethical, moral and scientific issues surrounding the research had been studied by a specially created committee.
The amendment was defeated by 212 votes to 92, with the lords saying the ethical issues should be debated by a special committee later. That cleared the way for the cloning measure's approval.
Fertility expert Lord Winston, who chairs the House of Lords' science and technology committee, spoke out strongly in favor of embryo research.
``There is no doubt that on your vote, my Lords, depends whether some people in the near future get the treatment which might save them from disease or, even worse, death,'' he told the lords.
The change relaxes the rules that limit medical research on human embryos under the 1990 Human Fertilization and Embryology Act, which permitted research on donated embryos only for strictly limited purposes, including studies on infertility and the detection of birth defects.
The Human Fertilization and Embryology Authority, which polices embryo research, has promised to consider cloning applications for some types of research, such as stem cell experiments. Those would inevitably involve cloning of embryos, because the goal is to treat patients with perfectly matching tissue transplants.
Peers heard during the debate that it could take up to a year before the first research permits were granted and that a breakthrough in the field could take a further 10 years.
An embryo is essentially a ball of stem cells that evolves into a fetus when the stem cells start specializing to create a nervous system, spine and other features - at about 14 days. Scientists hope that by extracting the stem cells from the embryo when it is three or four days old, their growth can be directed in a lab to become any desired cell or tissue type for transplant.
The hope is that one day it will be possible to grow neurons to replace nerve cells in a brain killed by Parkinson's disease, skin to repair burns and pancreatic cells to produce insulin for diabetics.
Scientists would create a clone of a sick patient by removing the nucleus of a donor egg and replacing it with that of a cell from the patient. The egg would be induced to divide and start growing into an embryo. The cloned cells would be genetically identical to the patient's and therefore theoretically overcome problems of transplant rejection, which happens because the immune system fights foreign tissue.
``The human embryo has a special status and we owe a measure of respect to the embryo,'' said health minister Lord Hunt of Kings Heath, who supports the change.
``We also owe a measure of respect to the millions of people living with these devastating illnesses and the millions who have yet to show signs of them. This is the balance we must make.''