The Vice-President of Iraqi Kurdish region, Jaafar Aimenky announced the decision in Parliament at Arbil, the capital of Iraqi Kurdish region.
"The United States has repeatedly emphasized to the leaders of the Kurdistan Regional Government that the referendum is distracting from efforts to defeat ISIS and stabilize the liberated areas".
Kurdish lawmakers convened parliament in Irbil for the first time in two years to pass the measure, with 65 out of 68 parliamentarians in the 111-seat body present voting in favor.
Controversially, the vote will also be held in so-called disputed areas outside the Kurdistan Regional Government's (KRG) official boundaries.
Mr Barzani was adamant that the vote would not be delayed. Late last month, Kirkuk's provincial council voted to take part in the referendum.
Washington opposes the referendum on the grounds that it would weaken Arab-Kurdish joint military operations, which have helped send the IS group into retreat in both Iraq and war-torn Syria.More news: World XI bowl in decider; Hasan Ali returns for Pakistan
A vehicle bomb explosion targeting a shop selling alcohol in Iraq's northern city of Kirkuk on Saturday killed two civilians and wounded eight, a security official said.
The opposition Gorran, the second-largest party in parliament, and the smaller Kurdistan Islamic Group, boycotted the vote and called it invalid.
"We, from the KDP, believe that except for independence, there is no other way to give the people of Kurdistan a guarantee that genocide will never be repeated", he added.
KRG leader Masoud Barzani on September 15 said that the referendum will be held as planned despite objections from Baghdad, Turkey, the United States and other Western nations.
In recent years, there have been tensions between Baghdad and Kurdistan over power-sharing, oil revenues and territorial disputes.
Even the United States, which initially endorsed the referendum, has warned against dire consequences of the KRG's unilateral declaration of independence.