Recent disputes over an election law that is at the heart of the nation's sectarian political system had pushed Lebanon to the brink of crisis, threatening to leave it without a parliament for the first time.
The new law will extend parliament's term by almost a year until next May, avoiding a legislative vacuum when the chamber's current term ends on June 20.
It will create a proportional representation system for parliament and alter the number of districts from which lawmakers are elected, among other changes.
"Today, cabinet approved the law ... with an extension of parliament's term by 11 months for technical reasons" to prepare for the polls under the new law, Prime Minister Saad al-Hariri said. Parliament, which is set to meet on Friday, must now also approve the law.
Elections are likely to take place on May 6, 2018 and parliament could extend its term until May 20, Information Minister Melhem Riachy told journalists earlier on Wednesday.
Lebanon's rival parties agreed this week on the draft electoral law after months of political wrangling, paving the way for the first elections in eight years.
Parliament has extended its own mandate twice since current lawmakers were elected in 2009 for what was meant to be a four-year term.
