The proposed legislation would set a possession limit of 2 grams for cocaine, ice and heroin and 0.5 for ecstasy.

Under the proposed laws, people caught with drugs up to the possession limit would be given a $100 fine as opposed to going through the justice system.

As well, police would confiscate the drugs and the person would be referred to a health program.

The private members' bill was foreshadowed by Labor backbencher Michael Pettersson in December.

He told the assembly on Thursday that it was time to move on from the criminalisation of drugs.

"The community has moved on from the war on drugs and it's time to move on from criminalisation," he said.

"We know the traditional 'just say no' approach hasn't worked.

"A threat of jail time or a criminal record put simply does not deter people from taking drugs, it never has and it never will."

Mr Pettersson was also responsible for the legalisation of cannabis possession in the ACT. The laws came into effect last year.

The bill won't be debated in the chamber until at least December.

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The Liberals put forward a motion the bill be referred to a select committee, which was supported by Labor and the ACT Greens.

The select committee will comprise one Labor member, one Liberal member and one Greens member. The chair will be a member of the opposition.

It will report to the assembly on the last sitting day of the year, December 2.

The opposition has indicated they are open to supporting the laws.