The Scottish Government will ask Holyrood next month to formally withhold consent to the Internal Market Bill.
Scottish secretary Alister Jack insisted passing the controversial legislation is 'the right thing to do'.
The controversial legislation which breaches international law cleared its first Commons hurdle by 340 to 263.
The post-Brexit Internal Market Bill is an 'abomination' and a 'naked power grab', Nicola Sturgeon said.
The UK government has insisted powers will be returned from Brussels to the devolved administrations.
Chief secretary to the Treasury Steve Barclay turned down a request for borrowing powers for Scotland.
The PM said there has been good co-operation between the four UK nations despite 'surface differences'.
Committee believes UK Environent Bill as it stands would only allow Scottish ministers limited say.
Immigration is reserved to Westminster but the Scottish Government is calling for powers to be split.
Some MPs cheered as royal assent was confirmed for the European Union (Withdrawal Agreement) Act.
The Welsh Assembly joined Holyrood and Stormont in formally refusing consent to the Bill.
Derek Mackay will publish his draft spending plans on February 6, prior to the UK Budget on March 11.