The announcement was made yesterday by employment relations minister, Jo Swinson (pictured), who called the current system "old-fashioned" and "rigid".
Swinson believes the new system will ensure "talented women" are kept in the workforce and employers will have more "motivated" and "productive staff".
The consultation will look at how the new system will work and fit together with current arrangements for maternity and paternity leave and adopters, as part of the government's commitment to create a modern workplace.
This will influence how the government legislates under the Children and Families Bill 2013, introduced earlier this month which includes the proposals for shared parental leave and flexible working.
From 2015, mothers will be able to end their maternity leave and pay, and share the untaken balance of leave and pay as "flexible parental leave" with their partner. Parents will be able to share 50 weeks' leave and 37 weeks' pay that is now only available to the mother. Similar arrangements will apply to adoptive parents.
Swinson said: "Crucially, these proposals will drive a real cultural shift and help working dads play a greater role in their child's early months.
"We want to shatter the perception that it is mainly a woman's role to stay at home and look after the child, and also that flexible working only has benefits for parents and carers.
"Employers too can gain from a system which allows them keep talented women in the workforce and have more motivated and productive staff.
"This consultation will ensure we get the detail right for business and families on how these new proposals will work. The first thought we always had when designing this system was that it did not add significant burdens to business and was as simple as possible for everyone to use.
She added: "This consultation is about getting the detail right so we can achieve these goals."
Deputy prime minister, Nick Clegg said: "It's high time that the existing system of maternity leave is overhauled so that it's easier for women to get back to work earlier if they choose.
"A new system of shared parental leave is not only good news for parents and parents-to-be, but for employers who will benefit from having a workforce that is more flexible and motivated."
Clegg added: "We now want to hear from working families and employers on how they think this can work in a way that's simplest all round for those involved."
