Primary Industries Minister Tim Whetstone says under proposed amendments, local councils will have six months to apply to remain GM-free, though a final decision will still rest with the minister.

Councils must consult with primary producers and food manufacturers in their area as well as the broader community.

Kangaroo Island will also remain GM-free.

"This agreement is a great outcome for South Australian farmers who will have the opportunity to reap the benefits of growing GM where that is best for their business," Mr Whetstone said.

Opposition primary industries spokesman Eddie Hughes said the bipartisan approach to the issue would benefit primary producers while also providing a voice for those people who still had concerns about GM crops.

He said Labor had never doubted the science behind GM, but also listened to those growers who believed they gained a market advantage from being GM-free.

Greens MP Mark Parnell said the legislation, which passed the lower house on Tuesday, would be a bitter blow to the many SA food companies that supported the moratorium.

"They recognise the importance of South Australia remaining the only mainland GM-free state, a place where we can promote our natural clean and green image, especially to growing overseas and domestic markets," he said.

SA's GM moratorium was first introduced in 2003 by the previous Labor government and under the current legislation, it is due to remain in place until 2025.

The Liberal government last year conducted an independent review that found the ban had cost the state's grain growers at least $33 million over the previous 15 years.

In response, the government drafted a bill to lift the ban but it was defeated.

The minister then used regulations to get around the ban but the Greens were aiming to disallow those moves again this week.

Mr Whetstone said passage of the legislation would provide farmers with the certainty they need to invest in GM seed and plant GM crops in time for the 2021 grain growing season.

"After 16 years and millions of dollars in lost economic and research opportunities, it is a historic day for farmers in this state who can look forward to the choice in what they want to grow," the minister said.

"Lifting the moratorium will not only provide economic benefits for our farmers but it will put South Australia on a level playing field with every other mainland state in Australia which has had access to GM technology for at least a decade."

Grain Producers SA chief executive Caroline Rhodes said the moratorium had offered little in the way of trade and marketing benefits to the majority of agricultural producers.

Australian Associated Press