Parliament's national security and intelligence committee wants a register of lobbyists acting on behalf of foreign powers, and a parallel register for MPs who take actions on behalf of foreign governments.
Committee chair Andrew Hastie said Australia's security agencies had warned of a "significant increase of covert influence activities" within Australia.
"These represent a threat to Australia's sovereignty, the integrity of our national institutions and the exercise of our citizens' rights", the Liberal MP said on Monday.
The bill aims to curb foreign influence by establishing a register of people acting on behalf of a foreign power, and former ministers who take foreign lobbying work within three years of leaving parliament.
Former senior ministerial staff and senior public servants will also carry additional obligations and for a longer period of time.
Shadow attorney-general Mark Dreyfus said this was the third time the bill had to be redrafted, after the first was "hopelessly flawed", but Labor is supporting it.
He said it was not a concern when foreign companies or governments try to influence Australia.
"The concern is when that is attempted to be done in a covert way, a secret way. This scheme is directed at making it public and making it overt," he told reporters.
Oxfam Australia's Rachel Ball welcomed the "sensible" decision to exempt charities, but a GetUp spokeswoman said it will affect work like saving the Great Barrier Reef.
"In working with allies across the globe to save our reef, GetUp will be classed a 'foreign agent' for trying to protect our national heritage," she said.
The bill caused problems with the Chinese government after reports in 2017 that it was aimed at curbing growing Chinese influence in Australian politics.
The bill has bipartisan support and is due to be introduced to the lower house on Tuesday.