The Personal Insolvency Bill will be published on Friday following approval from the Government.
Taoiseach Enda Kenny said it was a radical measure that would allow those unable to pay their debts to be discharged from bankruptcy in three years rather than 12.
Mr Kenny said it would institute non-judicial methods of dealing with debt settlement.
He said banks would have to be more proactive in dealing with economic problems, which were partially of their own making.
A clause in draft legislation published by the Government earlier this year said that a majority of creditors would have to agree to a deal with a borrower before an insolvency would proceed.
It is understood that measure, which has been described as a veto by critics, will remain in the legislation although sources said it would be tweaked.
Tonight Bank of Ireland, AIB, Permanent TSB, KBC and Ulster Bank met the Government's Economic Management Council, which is made up of the Taoiseach, Tánaiste, Minister for Finance and the Minister for Public Enterprise, to be briefed on the contents of the legislation.
In a statement, AIB said it had proposed a number of measures including split mortgages, trade down negative equity mortgages and a voluntary sale for loss option.
Minister of State Jan O'Sullivan will on Thursday give more details of the proposed mortgage-to-rent scheme, whereby those in difficulties could remain in their house and rent it back from the financial institution.
Mr Kenny also indicated the Dáil summer recess, due to start on 19 July, may be delayed in order to complete the second stage of the Bill.
Sinn Féin's Gerry Adams said he agreed with Fianna Fáil’s Micheál Martin that the Bill should be introduced in the Dáil before the media.
Mr Kenny said a new Mortgage Advice Service would be set-up over the summer to be overseen by the Minister for Social Protection.
He would not give details of the Bill, such as the nature of any veto banks might have on arrangements with debtors.
The Taoiseach said the measure would have to be re-read and proof read and there was a great deal of work to be done before Friday's publication.
Tánaiste Eamon Gilmore said the Bill was a mammoth undertaking, which would change the relationship between the borrowers and the financial institutions.
KBC Bank Ireland earlier announced that it will be piloting medium-term mortgage arrears resolution options with a number of its customers who are experiencing difficulties.
