Rwanda's cabinet has voted to scrap the death penalty, Justice Minister Tharcisse Karugarama says.
Many of those responsible for the genocide have yet to face justice
He said if the legislation is approved by parliament, those on death-row would instead serve life in prison.
The change would enable countries which arrest genocide suspects but which object to capital punishment to extradite them to Rwanda.
Some 800,000 Tutsis and Hutu moderates were slaughtered during the country's 100-day genocide in 1994.
Most of the high-profile genocide cases have been tried at the International Criminal Tribunal for Rwanda (ICTR) in Tanzania.
Since 1997 the tribunal has convicted 29 ringleaders of the genocide and acquitted five people, according to its website.
Frustrated at its slow process, Rwanda wants suspects transferred to face trail at home.
Some genocide survivors have objected to dropping capital punishment saying it acts as a strong deterrent.
The BBC's Geoffrey Mutagoma in the capital, Kigali, says that over the last couple of months the justice ministry has been holding public consultations around the country about dropping the death penalty.
"The consultations that we have held since October showed us that Rwandans favour the abolition of the punishment," Mr Karugarama told AFP news agency.
"I cannot decide for parliament, but given the support for the abolition, I hope that they will vote for the law," he said.