The ACT government has moved to ban the sale of electronic cigarettes to minors and ensure they cannot be used in smoke-free areas across the territory.
Advertising of e-cigarettes – otherwise known as vapours – would be heavily restricted in public places and vending machine sales would also be banned.
Promotions and customer reward schemes would also be banned along with product giveaways and sponsorship deals.
The proposed legislation comes after a lengthy public consultation that resulted in 242 submissions from individuals, business owners and public health organisations.
ACT Minister for Health Simon Corbell said the changes were supported by the National Health and Medical Research Council and would minimise potential harms to the community.
"While the risks and benefits of e-cigarettes are not fully known, the potential harms to public health warrant a precautionary approach," he said.
"We particularly want to prevent the uptake of e-cigarettes by non-smokers, including children and young people."
Mr Corbell said the proposed restrictions were designed to protect public health without restricting access to non-nicotine e-cigarettes by smokers wanting to quit.
"The government is aware that a number of Canberrans are using e-cigarettes to support their quit attempts," he said.
"However, nicotine-containing e-cigarettes have not been approved by the Therapeutic Goods Administration as a quit smoking aid and it will remain illegal to sell or possess e-cigarettes that contain nicotine without a licence."
The adult smoking rate in Canberra is the lowest in Australia at 9.9 per cent.
The proposed changes would ensure ACT legislation is consistent with changes introduced in NSW in June and Queensland in January.
The NSW Parliament passed new laws to ban the use of e-cigarettes in cars with children present although they can still be used in cafes and on public transport.
The Queensland government has passed legislation to treat e-cigarettes the same as tobacco and other smoking products.
Submissions to the ACT government proved regulation of e-cigarettes was controversial, with health groups and retail associations calling for restricted sale.
"The consultation told us there is concern within the community about the possible health risks of e-cigarettes," Mr Corbell said.
E-cigarette manufacture Nicoventures, which was established by British American Tobacco in 2010, has previously welcomed a regulation of the ACT market.
Heart Foundation chief executive Tony Stubbs has also voiced concern about the lack of accessible information regarding the contents and health risks of e-cigarettes.
Jeff Rogut, executive director of the Australasian Association of Convenience Stores Limited, has also called for strict regulations to ensure legitimate retailers were able to sell e-cigarettes.
"Minors should not be allowed to purchase the products, however in the 'real world' youth smoking does happen so personal vaporisers could offer a solution to younger people, who obtain tobacco illegally, from continuing to smoke tobacco," he said.
The Cancer Council has voiced concerns e-cigarette use could act as a gateway to tobacco use by teenagers, despite admitting further scientific research was required. The Australia Medical Association has also condemned the use of starter packs that are promoted to new users.
The proposed changes will be introduced to the ACT Legislative Assembly next year.