The state governor, Sunder Singh Bhandari, declared the Freedom of Religion Bill would be brought before the state assembly during the session that opened on Tuesday.
The law - known as Dharam Swatantrata Vidheya - will be similar to anti-conversion laws that exist in some other Indian states.
Gujarat has been the scene of considerable religious tension over the last several years.
Parliamentary Affairs Minister Ashok Bhatt told the BBC the final shape of the new law will be decided at a cabinet meeting next week.
Mass baptism
Last year, the government in Tamil Nadu came under severe criticism from various public groups and political parties for introducing the law, which they said was against religious minorities and low-caste Hindus.
However, in December police arrested a number of people who were organising a mass ceremony.
Thousands of low-caste Hindus - known as Dalits - were due to be converted to Christianity and Buddhism.
The event was organised in direct defiance of a tough new anti-conversion law, similar to the one planned by the Gujarat authorities.
The wording of the law in Tamil Nadu is designed to prevent forced conversions but many Christian leaders say its aim is to stop all conversions.
The recent conversion of whole low caste Hindu communities to other religions has alarmed Hindu organisations.
Plans to introduce the new law come a few months after the ruling BJP retained control of Gujarat in the state elections and as the party strikes a controversial deal with its right-wing Hindu parent organisation the RSS.
Support
It is being seen as an attempt to pursue a more right-wing pro-Hindu agenda.
The RSS gave controversial support for the Chief Minister of Gujarat, Narendra Modi, in the elections last October.
In Tamil Nadu, Hindu leaders accused evangelical Christians of bribing the poor by offering inducements to convert and they saw the new law as a way of protecting them.
During the last few years several instances of Christians being targeted for practising conversion of tribal groups have been reported from Gujarat.