Chatree Pinyai, head of ministry's legal department, confirmed to dpa that draft legislation approved by the National Council for Peace and Order Wednesday has been sent to the newly appointed National Legislative Assembly for action.
"The law will be put into place by the end of the year," Mr Chatree said.
Despite calls for urgent action on the surrogacy issue, Mr Chatree said it would be "impossible" to enact it within the next three weeks.
Thailand has re-examined the legal position of surrogacy, which is not regulated at present, following a scandal involving a surrogate baby left in Thailand by an Australian couple and the discovery of nine surrogate babies found in a Bangkok condominium, all fathered by the same man.
Under the new surrogacy law which has 48 sections and a provisional clause, a committee will be formed to take charge of protecting children born through assisted reproductive technology (ART) and specify criminal penalties for those involved in commercial surrogacy.
It will allow legally married couples who commission surrogacy to file a petition with a Thai court requesting parental rights to the baby. Current regulations only allow intended parents to adopt their surrogate babies.
Criteria has been drawn up to determine legal parental status of children born to surrogates and control research and studies in medical science relating to embryo and ART, ensuring that the technology is not abused.