The Ukrainian parliament has approved legislation that lifts the ban on the purchase of farmland in a bid to unlock $8 billion worth of aid from the International Monetary Fund (IMF).

The bill, which is intended to stimulate investment in agriculture, was passed by 259 votes out of 450 late on Monday and opens up the sector to Ukrainians from 1 July, 2021, and domestic companies from 2024.

The new law would be followed by a national referendum on whether to allow foreigners to buy farmland.

The issue of allowing the purchase of agricultural land has been mired in controversy with supporters claiming it would unlock enormous potential in one of the world's leading grain exporters.

Critics complain that it would allow rich businessmen to snap up vast swathes of prime land and give undue advantage to foreigners over locals.

Ukraine's President Volodymyr Zelensky, while speaking during an emergency session at parliament, emphasized the need for the IMF loan.

"It is really important for us to sign the memorandum with the IMF, and you know well that the two main conditions were the land law and the banking law."

In a televised address Prime Minister Denys Shmyhal backed the president: "Without the support of international organizations we will fall into the abyss of a financial meltdown," he warned.

Lawmakers on Monday also approved a banking law that stops former owners of liquidated or nationalized banks from regaining ownership rights or gaining access to state-funded compensation.