The Iraqi government plans to bring in a new law to allow former members of ex-president Saddam Hussein's Baath party to return to official posts.
Saddam Hussein's Baath party was predominantly Sunni
The law creates a three-month period for the ex-members to be challenged, after which they will be immune from prosecution over the Saddam era.
If ratified, it will replace the de-Baathification programme that was created to eject key party members.
The US has long argued the new law is needed to win over minority Sunnis.
Saddam Hussein's regime was predominantly Sunni and many figures were removed from government after his fall under an edict from ex-US administrator Paul Bremer.
WHO ARE THE BAATHISTS?
The party was the political instrument of Saddam Hussein's rule
An estimated 2.5 million Iraqis were party members
Banned and broken up by US administrator in May 2003
Baathism was a pan-Arab secular nationalist movement
The army was disbanded, thousands of teachers, university lecturers and civil servants were sacked and anyone who had been a member of the higher tiers of the party was banned from government employment.
However, many were reinstated after the US found that it had cleared out key ministries and the military without having any replacements.
The new legislation will be presented to parliament by Prime Minister Nouri Maliki, a Shia, and President Jalal Talabani, a Kurd.
In a joint statement, they said they wanted to build a democratic Iraq free from sectarianism, racism and discrimination.
"This law will be a pillar in building national reconciliation and in starting the process of healing and rehabilitation," the statement read.
The legislation would exclude former Baath members charged with crimes or still sought for them.
But it will grant state pensions to many former Baathist employees even if they are not given new posts.
Outgoing US ambassador Zalmay Khalilzad said the law would give ex-Baathists "the opportunity to return to their jobs, provided they were not at the highest levels of the former regime and have not been involved in criminal activity".
Much of the Sunni insurgency is thought to be centred on dismissed military men from the Baathist regime.
The law must still pass parliament and has already drawn opposition.
The Shia chairman of the current de-Baathification programme, Ali al-Lami, said the proposed law was "unconstitutional" and would "reinstate employees of Saddam's security agencies and paramilitary forces".
Analysts say the law may be a measure to head off opposition to the new Iraqi unity government from predominantly Sunni neighbours such as Saudi Arabia and Jordan.
There is a key meeting of the Arab League on Wednesday and Thursday in the Saudi capital, Riyadh.