The bill, which was passed by the Lok Sabha last year, has been pending in the Rajya Sabha. It had to be referred to a select committee of the upper house, which has now submitted its recommendations.
However, the government could not ensure a constitutional status for the bill as it could not pass a separate bill for the purpose in the Lok Sabha.
According to sources, while the government has agreed to separate the Lokpal office from the Lokayuktas in states, it has not agreed to the panel's proposal on the appointment of the Central Bureau of Investigation's (CBI) director.
The bill also proposes to create a prosecution wing of the CBI to fast-track corruption cases.
The sources further said the government has not favoured the suggestion of the select committee that an official facing an inquiry from the Lokpal should not be heard during the preliminary probe.
If passed by the cabinet, the bill will be introduced in the Rajya Sabha for consideration and passing.