Ortega, who is under sanctions from the West due to human rights violations, was himself behind the bill that was pushed through on Thursday.
The law change means that 79-year-old Ortega and his wife Rosario Murillo, 73, now have the opportunity to coordinate the country's institutions, including its legislative assembly, judiciary, and electoral and supervisory authorities.
According to Reed Brody, an American lawyer and part of a group of UN experts examining the situation in the country, the reform means that the president and his wife "cement their absolute power".
Daniel Ortega, once the leader of the left-wing Sandinista rebels, has become increasingly authoritarian. In recent years, his regime has imprisoned hundreds of opposition members while several organizations, such as Nicaragua's Red Cross and several Catholic aid groups, have been shut down.
