The plans will be put before MPs today as part of the Coalition's new children and families bill.
It is designed to allow fathers to play a greater role in raising their children while at the same time help persuade mothers to return to work at a time that is best for them.
The proposed reforms will give parents greater flexibility about how they 'mix and match' care of their child in the first year after birth. They may take the leave in turns or take it together, provided they have no more than 52 weeks combined in total.
Business minister, Jo Swinson believes the current workplace arrangements are "old-fashioned and rigid". She said: "The Children and Families Bill will bring the way mums and dads balance their lives at work and at home into the 21st century."
The bill also includes the extension of the right to request flexible working to all employees.
Deputy prime minister, Nick Clegg, has championed moves to allow parents to divide up a year's worth of parental leave between them insisting the current rules belong "in the 1950s".
Work-life organisation, Working Families has welcomed the publication of the bill saying the changes are "good for families and good for business".
Working families, chief executive, Sarah Jackson said: "Employers who allow flexible working benefit from better retention rates, reduced absenteeism and from loyal and motivated employees.
"We welcome the greater flexibility for parents to share the leave and pay in the first year of their baby's life.
Jackson added: "Over time these changes will change attitudes in the workplace, allow fathers more time to spend with their children, and start to tackle the maternity discrimination that so blights our helpline callers."
Anand Shukla, chief executive of the Family and Parenting Institute, said: "Parents crave greater flexibility and these new proposals will help parents balance work and home life in a modern way.
"While it will take time for employers to adjust and plan, it will help women return to work earlier and provide dads with an opportunity to spend time with their children in the early years."