Advocates of net neutrality hope the move in the home of the global technology industry will have national implications, prompting Congress to enact national net neutrality rules or encouraging other states to follow suit.
It's the latest example of the nation's most populous state seeking to drive public policy outside its borders and rebuff President Donald Trump's agenda.
Brown did not explain his reasons for signing the bill when the decision was announced.
"This is a historic day for California. A free and open internet is a cornerstone of 21st-century life: our democracy, our economy, our health care and public safety systems, and day-to-day activities," said Democratic Sen. Scott Weiner, the law's author.
The Federal Communications Commission last year repealed rules that prevented internet companies from exercising more control over what people watch and see on the internet.
California's measure is likely to face a legal challenge from internet companies.
Telecommunications companies lobbied hard to kill it or water it down, saying it would lead to higher internet and cell phone bills and discourage investments in faster internet. They say it's unrealistic to expect them to comply with internet regulations that differ from state to state.
USTelecom, a telecommunications trade group, said California writing its own rules will create problems.
"Rather than 50 states stepping in with their own conflicting open internet solutions, we need Congress to step up with a national framework for the whole internet ecosystem and resolve this issue once and for all," the group said in a Sunday statement.
Net neutrality advocates worry that without rules, internet providers could create fast lanes and slow lanes that favor their own sites and apps or make it harder for consumers to see content from competitors.
That could limit consumer choice or shut out upstart companies that can't afford to buy access to the fast lane, critics say.
The new law prohibits internet providers from blocking or slowing data based on content or from favoring websites or video streams from companies that pay extra.
It also bans "zero rating," in which internet providers don't count certain content against a monthly data cap - generally video streams produced by the company's own subsidiaries and partners.
Oregon, Washington and Vermont have approved legislation related to net neutrality, but California's measure is seen as the most comprehensive attempt to codify the principle in a way that might survive a likely court challenge. An identical bill was introduced in New York.