A last-minute change of tack has seen Labor's childcare legislation passed on what could be the last day of the parliamentary term, in a move welcomed by Indigenous childhood education and care (ECEC) experts.

The three-day guarantee will abolish the Liberal-era Activity Test, allowing families to access three days a week of subsidised early childhood education regardless of how much they work or study.

It was rushed through the Senate on Thursday afternoon with the support of minor parties and senators David Pocock, Fatima Payman and Tammy Tyrrell. The Coalition, along with Senators Ralph Babet, Gerard Rennick and One Nation opposed the bill.

Labor has said families earning between $50,000 to $100,000 will be better off under the legislation, arguing they are expected to save an average of $1,460 per year.

"The Liberal's prohibitive Activity Test locked out the children who can most benefit from early childhood education and care, and has not increased workforce participation," early childhood education minister Dr Anne Aly said.

"The Coalition would put universal access to early learning at risk, it's clear they don't understand the benefits of early childhood education and care."

The move was welcomed by Indigenous-led organisations who have argued evidence showed "vulnerable children get the greatest benefit from accessing quality ECEC".

"The community-controlled ECEC sector, our families and our communities have been calling for this change for years," SNAICC chief executive Catherine Liddle said.

"Today's legislation shows that their voices are being heard.

"SNAICC has advocated for many years to remove the Activity Test, and we are thrilled to see this legislation passed today.

The deal seemed dead in the water after Labor elected to have it sent to an inquiry, endangering the chances of it being passed this term. National Indigenous Times had been made aware of grumblings from community members towards the Albanese government and the postponement.

At a press conference on Thursday, the Greens said this was an example of the strength their party had in Parliament, arguing the government had reversed its position and were forced to "side with families, to side with parents and with kids desperate for those crucial early years of education".

Greens early childhood education spokesperson, Senator Steph Hodgins-May said the activity test was locking out "more than 100,000 kids from early childhood education".

"Many of those kids come from disadvantaged backgrounds, and are First Nations kids,' she said.

"It also keeps 40,000 parents out of work, and we know that the majority of those parents are women."

Asked about the role of the Indigenous ECEC sector, Senator Hodgins-May said: "SNAICC have been a terrific pressure point of pressure in this debate."

"They know that First Nation kids are disproportionately affected by poor access to early childhood education and being locked out due to the activity test."

Jay Weatherill from Minderoo Foundation's Thrive by Five campaign said it was a "great victory" for Australian families.

"Research shows that access to high-quality care and learning in the early years can set children up for lifelong success," he said.

"However, restrictive policies like the Activity Test, high costs, and a lack of services have long prevented many children, mostly from vulnerable backgrounds, from accessing it."

The latest Closing the Gap data revealed developmental readiness for Indigenous children was worsening, with Ms Liddle arguing services delivered by Aboriginal community-controlled (ACCO) centres showed "better outcomes for those children not only in the early years, but throughout their life".

"The flow on effects of access to ECEC has the potential for wider impacts, with recent studies showing interventions in ECEC settings with vulnerable children and their families may be the key to reducing youth crime," she said.