Officials said the Cabinet approved the draft law under which multi-party parliamentary elections are expected to be contested before the end of the year.
King Abdallah abruptly dissolved Parliament last November after it completed half of its four-year term and called for early elections by 2010.
A month later, the monarch appointed a new government led by Palace aide Samir Al-Rifai charged with speeding up electoral changes with a mandate to bring genuine political reforms and broader representation.
No official reason was given at the time for the dissolution of what was considered a rubber stamp assembly, composed of 110 mainly tribal pro-government loyalists, but politicians said it lost credibility by inept handling legislation.
The draft law will be effective after a royal decree is enacted this week.
Political sources say its main changes include adding 10 extra parliamentary seats with six seats allocated for women under an existing quota system while the underrepresented main cities of Amman, Zarqa and Irbid were given an extra four seats in a token gesture.
Parliament, a stronghold of tribal support, was elected in November 2007 under a controversial electoral law that reduced the representation of the largely Palestinian-dominated cities, which are Islamic strongholds, in favor of rural and Bedouin areas.
King Abdallah had hoped for a new US drive for Middle East peace and the stalemate in Israeli-Palestinian relations is casting a shadow on a country a majority of whose six million citizens are of Palestinian origin.
Many Jordanians fear their countrymen of Palestinian origin will settle permanently in the kingdom if they cannot return to the Palestinian territories, and are resisting their political empowerment in Jordan.
Political sources say a leaked copy of the new draft law retains a voting system first introduced in 1993 with carefully tailored electoral districts.
Jordan's Islamist opposition, strident opponents of Israel, alongside independent politicians and liberals say successive governments have failed to deliver greater political liberalization.
