The first weddings will take place August 1, when the law takes effect, reports CBS News.
After Chafee signed the bill, the hundreds of people who gathered on the Statehouse grounds erupted into cheers as a chorus sang "Chapel of Love".
Once consigned to the political fringe, same-sex marriage advocates succeeded this year thanks to a sprawling lobbying effort that included support from organized labour leaders, religious clergy, leaders including Chafee and Providence Mayor Angel Taveras and hundreds of volunteers.
The Catholic church was the most significant opponent, with Bishop Thomas Tobin urging lawmakers to defeat what he called an "immoral and unnecessary" change to traditional marriage law.
On Thursday, Tobin repeated his opposition, writing in a letter to the state's Catholics that "homosexual acts are always sinful".
The Rhode Island legislation states that religious institutions may set their own rules regarding who is eligible to marry within the faith and specifies that no religious leader is obligated to officiate at any marriage ceremony and no religious group is required to provide facilities or services related to a same-sex marriage.
Advocates in Rhode Island say that while they're proud the state is the 10th to legalize same-sex marriage, they expect other states to follow quickly as support for same-sex marriage grows around the country.
Delaware could be the next state to approve same-sex marriage.