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By Susan Cornwell

WASHINGTON, June 29 (Reuters) - The U.S. Senate gave solid approval on Wednesday to a relief plan to help Puerto Rico address its $70 billion debt, sending the measure to President Obama for his signing into law just ahead of a possible default by the U.S. territory on its next debt payment.

The measure passed the Senate on a vote of 68-30, and President Obama said in a statement he looked forward to signing the bill into law. The House of Representatives has already approved the bill.

"This bill is not perfect, but it is a critical first step toward economic recovery and restored hope for millions of Americans who call Puerto Rico home," Obama said.

The legislation would create a federal oversight board, appointed by Washington, with power to restructure Puerto Rico's unmanageable debt load.

The bill provides for a stay, or halt, to any litigation brought against the Puerto Rican government and its debt issuing agencies that is retroactive to December. This provides breathing room for the board to start the process of restructuring and oversee a sustainable budget process.

On Friday, Puerto Rico faces a potential default on a chunk of its debt if it cannot make $1.9 billion worth of payments. Puerto Rico's Governor, Alejandro Garcia Padilla, has said the island will default some of the debt.

Supporters said intervention by Washington lawmakers was necessary to help the island's 3.5 million U.S. citizens avert a "descent into chaos," as U.S. Treasury Secretary Jack Lew on Tuesday.

Puerto Rico has been waiting for months for Congress to act as its economic crisis worsened. It has already defaulted on some of its debt. The Caribbean island territory is reeling from a 45 percent poverty rate, as well as a steady flow of migration to the U.S. mainland that shrinks its tax base and shuttering of essential services.

In addition, it is suffering from a Zika virus outbreak that is hurting its critical tourism industry.

But many Puerto Ricans are leery of the proposed oversight board, fearing it could usurp the island's government and place investors' concerns over local priorities.

Puerto Rico's benchmark 2035 General Obligation bond rose 1 full point in price ahead of the final vote, to trade at 66.75 points, pushing the yield down to 12.663 percent.

Passage of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) came after leaders of both political parties warned that failure to approve the legislation could lead to a U.S. taxpayer-funded bailout.

"This is the best and possibly the only action we can take to help Puerto Rico," Senate Majority Leader Mitch McConnell, a Republican, said.