Foxconn, an electronics manufacturer formally known as Hon Hai Precision Industry, hopes to open a $10 billion plant in 2020 at a 1,000-acre site in southeastern Wisconsin.
Foxconn is a major supplier to Apple for its iPhones.
Wisconsin's Republican governor, Scott Walker, ordered the legislature into special session on Aug. 1 to consider the incentives package, which would award Foxconn $3 billion over 15 years in mostly cash incentives.
Foxconn, Walker, President Donald Trump and other leaders announced the deal on the incentives last month in a White House ceremony.
The 20-million-square-foot LCD plant would initially employ 3,000 people, but Walker and Foxconn said the company could ultimately employ 13,000 at the site.
Proponents have touted the project's investment potential and job creation, including an expected 22,000 ancillary jobs and 10,000 construction jobs.
"We need to do everything that we can to make businesses thrive to replace those that have closed or moved outside our state borders," Assembly Speaker Robin Vos, a Republican, said during Thursday's debate.
But critics including some Democrats have attacked the plan as corporate welfare, too expensive, rushed and potentially harmful to the environment.
"I think we need more time," Democratic Representative Jill Billings said. "I want a better deal and more guarantees for my taxpayers."
Thursday's vote did not follow strict party lines; it included three Democrats who voted in favor and two Republicans who voted against.
Early in a debate that lasted several hours, Assembly Democrats proposed referring the matter to the finance committee for review, which would have stopped the debate. The Assembly rejected the proposal with a 57-32 vote along party lines except for Republican Representative Todd Novak, who voted "yes."
The Assembly also voted to ignore three amendments proposed by Democrats, including one proposal to create a regional transit authority.
Wisconsin would not break even on the incentive package for at least 25 years, according to a legislative analysis released last week.