The Northern Territory government passed the Every Child Matters bill late Tuesday night, in what it said was the most significant overhaul of its child protection system in a generation.
The new law abolishes the Aboriginal and Torres Strait Islander children placement principle, which accords that First Nations people who are removed from their homes are kept within their own culture.
The government claimed that the reforms tackled the root causes of crime, protected children, strengthened families, and would break the cycle that saw young people fall through the cracks of the child protection system.
''Tonight we didn't just say every child matters, we put it into law," Territory Minister for Child Protection and Children and Families Robyn Cahill said.
The children placement principle emerged in recognition of the profound harms caused to the Stolen Generations and has been recognised in child welfare legislation since the early 1980s.
The new laws were passed on the same day as an interim report was handed down into the territory's child protection laws in response to the death of Kumanjayi Little Baby, who was abducted from a town camp in Alice Springs in April.
The legislation from the ruling Country Liberal Party has been condemned by the federal government, state leaders and First Nations leaders.
Federal Indigenous Australians Minister Malarndirri McCarthy, a Yanyuwa woman from the Gulf Country, immediately hit out at the laws.
"The Aboriginal and Torres Strait Islander Child Placement Principle is based on evidence and partnership and should not be disregarded," she said in a social media post.
"We continue to live with the intergenerational trauma of a historic child protection system that didn't work.
"These laws should not repeat that trauma."
Independent Senator Lidia Thorpe called on the federal government to use its constitutional power to overturn the laws.
She warned the bill will lead to another Stolen Generation, accusing the Territory government of running a racist agenda.
"This bill is the latest example. It is about demonising our families and stealing our children," she said.
While agreeing child protection laws needed to be overhauled, she said the problems were driven by workforce shortages, overcrowded housing, underfunded early intervention and inadequate support services.
Catherine Liddle, CEO of the Secretariat of National Aboriginal and Islander Child Care, said the laws would cause further harm to First Nations children.
"Overwhelming evidence from people who work with children every day of their lives was put to the scrutiny committee," she said.
The passage of the laws was driven purely by politics, she said.
However, LNP Senator Jacinta Nampijinpa Price was supportive of the laws.
"It is extraordinary that governments presiding over the continued failure of child protection systems across Australia now seek to lecture the Northern Territory about protecting vulnerable Aboriginal children," she wrote on X.
Senior federal minister Murray Watt said the government had no plans to intervene over the law.
"That is obviously a very big call, but our position has been expressed very clearly by my Northern Territory colleagues," he told the ABC on Wednesday.
