The USA Freedom Act, which was approved on a bipartisan 25-2 vote, would end large-scale data collection under the Patriot Act and other laws. It would need approval by the full House and Senate to go to the White House.
The measure, if enacted, would also allow challenges to national security letter gag orders and include other measures to improve transparency of data collection for law enforcement and intelligence efforts.
"Today's strong, bipartisan vote in the House Judiciary Committee to approve the USA Freedom Act demonstrates that surveillance reform is not a partisan issue, it's an American issue," said a joint statement from committee members.
"The USA Freedom Act reforms our nation's intelligence-gathering programs to ensure they operate in a manner that reflects core American values. This bill ends bulk collection once and for all, enhances civil liberties protections, increases transparency for both American businesses and the government, and provides national security officials targeted tools to keep America safe from foreign enemies."
A similar bill passed the House last year with White House support but stalled in the Senate.
Civil liberties groups generally welcomed the measure, but some said it should go further by ending warrantless searches.
Kevin Bankston of the New America Foundation's Open Technology Institute said the bill "would add several important new checks on the government's surveillance powers."
But he said he was "gravely disappointed that even though a majority of the House voted last year to close the loophole allowing for backdoor warrantless searches of Americans' data, the House's leadership and the House Intelligence Committee appear intent on blocking this crucial reform."
The committee said the measure was endorsed by a broad coalition of technology groups and civil liberties organizations including Facebook, Microsoft, Google, Yahoo and the Center for Democracy & Technology.
Elizabeth Goitein at the Brennan Center for Justice said however that the measure represents "incomplete reform" which "is not sufficient when constitutional liberties are at stake."
Lawmakers have been under pressure to rein in the vast data sweeping efforts of the National Security Agency and other US government entities since the leak of documents on the programs from former NSA contractor Snowden.
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