Justice Minister Félix Braz announced the news this week, saying he hoped it would be finally made law after years of delays.
Drawn up by the former government in 2010, the same-sex marriage draft law was due to be voted on late last year. But following a change of government in October, the vote was postponed.
Same-sex couples have only been able to mark their union under a PACS – based on French civil unions – meaning they have less rights and are unable to jointly adopt children.
While a small European nation, it is the first to have an openly gay Prime Minister and Deputy Prime Minister serving at the same time.
If approved, Luxembourg will be the 11th European country to recognize same-sex marriage, joining Belgium, Denmark, France, Iceland, the Netherlands, Norway, Portugal, Spain, Sweden and the UK.