The Council of Ministers passed the draft of the supplementary constitution amendment bill Tuesday evening.
"The cabinet has passed the draft of the bill unanimously," health minister Giriraj Mani Pokharel told reporters after the cabinet meeting in Baluwatar.
Earlier today, six parties of the seven-party alliance, minus Nepal Workers and Peasants Party, had approved the draft.
Leaders said the bill would address the issues raised by Madhesi parties as well as indigenous and backward communities.
The government is to introduce the bill in the Constituent Assembly (CA) meeting today. The CA meeting has been delayed by several hours because of lengthy political parleys over the demands of Madhesi parties.
Seven-party leaders have expressed confidence that the CA will function normally from today.
"We believe this [six-party] agreement will help end the deadlock. We've held several rounds of discussion with Madhesi parties and now we are confident that the Assembly will not be stalled again," CPN-UML leader Bhim Rawal told reporters after the signing of an understanding among the six parties earlier in the afternoon.