Israel passed legislation on Wednesday to set up the first Arabic-language academy marking the first time such an institution will exist in a non-Arab country.

After months of debates, the Knesset plenum passed a law co-sponsored by Jewish and Arabic MKs billed as the first outside the Arab world to seek to promote the Arabic language and coin new terms, a statement from the Knesset said.

"The academy will provide a bridge between cultural groups in Israel and between Israel and its neighbors," said MK Michael Melchior (Labor), a co-sponsor of the legislation.

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The institute, to be set up by Israel's Education Ministry, will work in parallel with an existing Hebrew-language academy and will promote research into ancient linguistic ties between Hebrew and Arabic, said Melchior. It will also study Arabic terminology, grammar, diction, and written Arabic. The academy will research the modern language and its adaptation to the technological era.

"This is an historic step," said MK Nadia Hilu, also from Labor, and who co-sponsored the law with Melchior.

"We have taken another step to advance equality," Hilu added, alluding to the complaints of many Israeli Arabs, about 20 percent of Israel's population, that Israel provides less funding for their towns than for those where Jews live.

MK Ahmed Tibi said he hoped the law would help even the score between the large number of Israelis who know Hebrew and the very few who know Arabic.

"Its status as an official language has been only cosmetic and superficial," Tibi told Reuters, noting that Israel's international airport had only had a couple of signs in Arabic before he complained two years ago.

"The minority here knows the language of the majority, but the majority tends to deny the existence of the minority," Tibi said.

Israeli studies have shown in recent years that a minority of Israeli Jews study Arabic at an advanced level, partly because it is an elective and not required in high school.

Tibi said some Israeli Arab children, who master Hebrew early to succeed in school, sometimes need reinforcement in Arabic language, literature and history.

"This (academy) could be one of the tools use to carry that out," he said.