However, new regulations on surrogacy have been deferred as the issues around commercial surrogacy are reviewed.
Cohabiting couples will be able to jointly adopt a child under the latest legislation, which is to be formally drafted and is likely to come in to force early next year.
It will also see unmarried fathers get greater rights in relation to their children.
Justice Minister Frances Fitzgerald said she has included new proposals in the General Scheme of the Children and Family Relationships Bill which will require clinics and hospitals to provide details of donors and children to a national donor-conceived person register.
“The key issue is to enable a child to know his or her identity. As a result anonymous donation will be prohibited,” the justice minister added.
She said she had decided to remove surrogacy from the bill at this stage because a Supreme Court decision on the issue is pending and “very critical issues need to be resolved relating to how our law deals with commercial surrogacies and the rights of children born through surrogacies”.
Ms Fitzgerald said more policy work and consultation is needed in these areas.
The existing provisions, which provide for a father to secure parentage of a child born through surrogacy if genetically linked to the child, will continue to apply and a commissioning mother will be able to apply for guardianship of the child.
The new draft legislation contains proposals the minister said “which will bring legal clarity to parentage, guardianship, custody and access for diverse families, thus benefiting a wide range of families in Ireland”.
Ms Fitzgerald added: “They put the interests of children centre stage in those decisions with profound implications for a child’s life.”
Under the new law cohabiting couples living together for three years in a committed relationship will be eligible to adopt children jointly. Civil partners, step-parents, and those cohabiting with the biological parent and those in loco parentis for a specified period will be allowed to apply for guardianship and custody.
Ms Fitzgerald said the 2011 Census showed there were more than 49,000 households of cohabiting couples with children under 15 and the number is rapidly increasing.
“A modern and caring Ireland cannot sustain the absence of adequate legislative provision to cater for the rights of these families,” she said.
Under the new law automatic guardianship will be extended to unmarried fathers who have lived with the child’s mother for at least 12 months, including three months after the birth.
The Children’s Rights Alliance welcomed the draft legislation and said the donor-conceived register is an important step in recognising the rights of children to access information concerning their genetic identity.
“We know the pain caused to the many adopted people who can’t establish the identity of their parents. This bill will ensure that donor-conceived children will not share the same pain,” it said.
The Irish Council for Civil Liberties welcomed the publication of the bill.
Speaking at Leinster House ICCL director Mark Kelly said he hoped the progressive law reforms will attract strong cross-party support and be swiftly enacted.
“Everyone who genuinely cares about children and families will welcome the publication of this draft bill, which will modernise family law by placing the best interests of the child at its core,” he said.
“Ireland is home to a rich diversity of families, including cohabiting married families, single-parent families, families where children are cared for a parent and a step-parent or by extended family members and families based on cohabiting couples, including those in civil partnerships. These proposals offer better protection to all forms of families by putting the child’s welfare and best interests at the heart of decisions on parentage, guardianship, custody and access.”