BERLIN -- Germany's plan for a car toll on its highways to raise money from foreign drivers has cleared its final parliamentary hurdle.

Parliament's upper house on Friday approved the much-criticized project, which the smallest party in Chancellor Angela Merkel's governing coalition insisted on pushing through.

All road users will pay the toll starting in 2016, but German car owners will be compensated by an equivalent cut in a separate car tax. Transport Minister Alexander Dobrindt has said the plan will raise 500 million euros ($566 million) annually.

It is a watered-down version of a plan that originally foresaw a car toll -- which, unlike many European countries, Germany so far lacks -- for all roads. It remains to be seen whether the plan will run into trouble with the European Union.