FILE PHOTO: Fuel drips off a nozzle during refueling at a gas station in Altadena, California March 24, 2012. REUTERS/Mario Anzuoni/File Photo

(Reuters) -California lawmakers on Wednesday voted to allow the sale of a higher-ethanol gasoline blend that could help bring down fuel prices in the largest U.S. auto market.

The sale of E15, a blend containing 15% ethanol, would be allowed immediately once the bill is signed by Governor Gavin Newsom. California had been the only U.S. state that did not allow sales of the fuel.

The move likely will benefit biofuel producers and corn farmers, as it is will expand the market for their products to the most populous U.S. state.

California's state Senate passed the bill, AB 30, in a unanimous 39-0 vote. The measure passed the state Assembly in June.

Newsom had directed California regulators last year to study whether the state could increase ethanol blending in gasoline, but that work is not yet completed. California has been grappling with how to rein in skyrocketing pump prices while maintaining its ambitious environmental goals.

"California consumers cannot wait any longer," California Senator Laura Richardson said on the Senate floor while introducing the bill. She pointed to a University of California study that estimated that the fuel's availability could lower gas prices in the state by 20 cents per gallon.

"With today's passage of AB30, California is taking a big step toward lower gas prices and a cleaner, more sustainable future for families across the state," said Geoff Cooper, president of the Renewable Fuels Association, said in a statement.

"Many other states have already seen the benefits of E15 -- healthier air, better engine performance, and cost savings at the pump. Now, California drivers are on the cusp of experiencing those same advantages, and we urge Gov. Newsom to sign the bill into law as quickly as possible."

(Reporting by Nichola Groom; Editing by Kim Coghill)