Egypt's cabinet approved NGO draft law on Thursday in its weekly meeting referring it to the State Council for legal review, before later submitting a final version to the Parliament for a vote.
The new legislation would be applied to associations established by law or decree and organizations operating on the basis of international agreements signed by the government and each group's bylaws, state news agency MENA reported.
This draft law aims to "set a clear definition of NGO non-profit work and facilitate the establishment of NGOs to be by notification."
On Tuesday, Social Solidarity Minister Ghada Waly held a meeting with 20 NGO representatives to discuss the bill.
The cabinet has not released the draft bill to the media.
The draft, which has been in discussion for five years, was expected to be finalized last March.
The government's February 2016 decision to reopen the 2011 NGO foreign funding case has caused anger among rights advocates and NGO workers.
A number of rights activists have been facing charges of illegally receiving foreign funding for their NGOs since 2011 but the case was put on hold until recently.
In February, the authorities froze of assets of several Egyptian human rights activists and their families and banned them from travel.
These decisions have since been appealed.