Cleburne Mayor Scott Cain says it gives the businesses the power to choose one of three options: smoking, non-smoking or smoking only in designated areas.
"If you're not careful and you don't have that debate, you may end up over-regulating something that doesn't need to be regulated," he said.
Any business designated as smoking must post signs to let customers know.
Designated smoking areas have to be separated by a wall and door, much like Caddo Street Grill has had since it opened.
Caddo Street Grill's owner, Scott, says the ordinance lets him keep his customers who want to smoke.
"We'll let the patrons vote with their feet and go where they want to go, and I think that freedom's important for us as a restaurant," he said.
Cleburne City Council did make one change to the ordinance before the unanimous vote, and it had a direct impact on the Flamingo Bingo parlor, which caters to families.
Instead of banning anyone under 18 from a smoking facility, the council decided to allow anyone under 21 to enter, but only with a parent or guardian.
"That's a good deal," said Flamingo Bingo owner Steve Talavera. "That's a good thing, ‘cause then it gives you business. You know, you want Cleburne to grow. You don't want it to be small, and that'll help out the businesses, also."