"Although the bill includes a number of provisions that restrict or limit the Defense Department's ability to align military capabilities and force structure with the president's strategy and implement certain efficiencies, overall the administration is pleased with the modifications and improvements" that address its objections to earlier versions, the White House said in a statement.
The House overwhelmingly passed the bill last week on a strong bipartisan vote. Senate passage is expected Thursday night.
Congress has passed a defense policy bill every year since the Kennedy administration, but the 52nd year has been one of the more tortuous.
The House passed its version in June, and the Senate Armed Services Committee did the same. Senate Majority Leader Harry Reid, D-Nev., held off on full Senate debate until November, then tried to limit amendments amid administration concerns about efforts to impose new sanctions on Iran.
The White House feared that tough penalties would scuttle a nuclear deal with Tehran.
In a fallback plan, the Republicans and Democrats on the House and Senate Armed Services committees spent the Thanksgiving break working out a compromise bill that incorporated elements of their competing versions. The House passed it with no amendments. Reid's insistence that the Senate do the same drew the wrath of many Republicans, but they were expected to back the measure.
"Shameful," said Sen. John McCain, R-Ariz., who described the process as a perversion of long-standing Senate rules.
Armed Services Committee Chairman Carl Levin, D-Mich., said it was the "best we can do."
The legislation would:
Authorize a 1 percent pay raise for military personnel and cover combat pay and other benefits.
Strip military commanders of their ability to overturn jury convictions, require a civilian review if a commander declines to prosecute a case and require that any individual convicted of sexual assault face a dishonorable discharge or dismissal. The bill also would provide victims with legal counsel, eliminate the statute of limitations for courts-martial in rape and sexual assault cases, and criminalize retaliation against victims who report a sexual assault.
The Pentagon has estimated that 26,000 members of the military may have been sexually assaulted last year, though thousands were afraid to come forward for fear of inaction or retribution. Several high-profile cases united Democrats and Republicans behind efforts to stop sexual assault in the ranks.
The compromise also would change the military's Article 32 proceedings to limit intrusive questioning of victims, making it more similar to a grand jury
The legislation does not include a contentious proposal from Sen. Kirsten Gillibrand, D-N.Y., to give victims of rape and sexual assault in the military an independent route outside the chain of command for prosecuting attackers, taking the authority away from commanders.
That proposal drew strong opposition from the Pentagon and several lawmakers. Gillibrand's plan is likely to get a separate vote, perhaps as early as next month.
Among the other provisions, the bill would authorize funds for the destruction of chemical weapons in Syria and provide money to study the feasibility of establishing a missile defense site on the East Coast.