Attorney General Christian Porter says the draft Religious Discrimination Act is "well advanced", signalling it may be introduced to parliament in July.
Mr Porter admits the proposal is "not without its complications" but creates the need for a similar balance as in sex, age and race discrimination laws.
"We would define an attribute just as we've done with attributes around sexual orientation, or age, or race, or other matters such as disability," he told 6PR radio on Thursday.
"We would define an attribute which is 'religious adherence and expression', and then put into that Act a range of circumstances where it would become unlawful for people to discriminate against a person based on that attribute."
Former Nationals leader Barnaby Joyce along with other coalition MPs are expected to press for stronger religious freedom laws.
Mr Joyce is pushing for religious beliefs to be exempt from employment contracts, The Age and The Sydney Morning Herald report.
The laws would protect views such as those expressed by rugby player Israel Folau that led to his sacking.
"You can't bring people's faith beliefs into a contract," Mr Joyce told the newspapers.
"Your own views on who God is, where God is, or whether there's a God should remain your own personal views and not part of any contractual obligation."
Mr Porter says there's no easy avenue for extending the laws in such a way, as it would depend on the terms of individual contracts.
Liberal senator Concetta Fierravanti-Wells wants a Religious Freedom Act and says the election reinforced the need for more immediate legislative action.
An Australian Law Reform Commission review on the issue is not due until next year.
Australian Associated Press