Donald Trump has hailed the $1.5 trillion tax overhaul as a ‘historic victory’ for the American people.

Donald Trump has signed a contentious tax bill into law, the final step in the administration’s push to undertake the largest overhaul of the US tax system in over three decades.

The president signed the legislation at the White House on Friday, just before the Christmas holiday break, a self-imposed deadline Trump had promised to meet.

Trump told reporters in the Oval Office the law ushered in the “biggest tax cuts and reform in our country”.

“I’m very honored by it,” he said, according to a statement from the White House press office.

The bill is “for the middle class and a bill for jobs”, Trump said, adding that a formal signing ceremony would take place in two weeks.

The law provides dramatic tax breaks to US corporations, and families at all income levels will see their income tax drop starting next year, with the largest benefits going to the rich.

Will be signing the biggest ever Tax Cut and Reform Bill in 30 minutes in Oval Office. Will also be signing a much needed 4 billion dollar missile defense bill. — Donald J. Trump (@realDonaldTrump) December 22, 2017

The bill was approved in the US House of Representatives and the US Congress earlier this week, with both votes falling largely along parties lines.

Most Republicans backed the legislation, while Democrats voted against it.

Republican legislators say the Tax Cuts Act will give tax breaks to middle-class Americans and create jobs, and Trump has hailed it as a major victory as the first year of his presidency nears an end.

The bill is a “historic victory” and “an incredible Christmas gift for hardworking Americans”, Trump said earlier this week.

“I said I wanted to have it done before Christmas; we got it done,” Trump said during a cabinet meeting on Wednesday.

Critics, however, have called the legislation a “tax scam”.

They say it unfairly rewards corporations and wealthy Americans and would add $1.5 trillion to the federal deficit over the next 10 years and actually raise taxes on some middle-class families, said Reuters news agency.

Under the legislation, income tax rates will be reduced across all seven individual tax brackets.

But the bill gives individual citizens and married couples that fall into the highest income bracket – earning $500,000 and up annually – the largest income tax cut, which will drop from 39.6 to 37 percent.

The corporate tax rate will be lowered from 35 percent to 21 percent, effective January 1.