By Eoin Blackwell, AAP Papua New Guinea Correspondent
A second law restricting the age of serving prime ministers to 73 years and below was also repealed.
In tabling the repeal, Attorney-General Kerenga Kua said the Judicial Conduct Act and the Supreme Court Act of 2012 had outlived their use.
"Its primary objective was to disqualify judges of the national and Supreme Courts from presiding over cases in circumstances where independence and impartiality was thought to have been brought into question, and to punish them should they refuse to step down," he said.
The legislation was introduced at the height of PNG's political crisis following the surprise August 2, 2011 sacking of veteran PM Sir Michael Somare by his parliamentary colleagues, who replaced him with Mr O'Neill.
The Supreme Court ruled Sir Michael was unlawfully dumped, sparking a running battle between parliament and the courts, which culminated in a failed mutiny attempt on the orders of Sir Michael's alternative cabinet in late January 2012.
But one national election later and Sir Michael now backs Mr O'Neill, and is part of his 94-strong coalition.
An age restriction on the prime ministership - aimed at the time at keeping the 76-year-old Sir Michael away from the top job - was also removed by a vote of 85-0.
"As we move on, the government feels that the people have chosen these leaders and given the mandate and the trust to them," Mr O'Neill said.
"They must be given equal opportunity to take up any position in this country."