The Government will announce shortly that it is putting the military covenant on a statutory basis for the first time, it was reported.
Prime Minister David Cameron has faced claims he was watering down his commitment to write into law the state's duty of care to armed forces personnel.
Legislation being debated by Parliament allows the Defence Secretary to make an annual report on the military covenant, but stops short of giving it formal legal status.
Its passage has been delayed, with Tory backbench MP Philip Hollobone tabling an amendment for formal recognition of the covenant - a potential focus for rebellion.
But defence minister Andrew Robathan, who is steering the Bill through the Commons, told The Daily Telegraph: "We are putting the military covenant on a statutory basis for the first time."
The move comes amid concerns that military personnel are failing to be provided with the level of service they are entitled to in areas such as health, housing and pay.
Concerns over the Government's legal liability are thought to have prompted the formulation in the Bill - which has been strongly defended by Mr Cameron in the Commons.
The Telegraph said the law would not enshrine specific pledges about individual public services but concentrate on broader principles - such as that no-one should be disadvantaged because of their military service and, beyond that, that special treatment could sometimes be justified.
Labour has accused the Government of "running scared" on the issue.
Mr Cameron denied watering down his commitment at Commons question time this month.
"I do not believe for a minute that that is what is being done. What is going to happen is that we are going to clearly reference the covenant in law and then the covenant will be published and debated in this House every year," he told MPs.
"It is vital that we are able to update and improve it every year, because our military personnel face so many changing circumstances."
A government spokesman said: "Discussions are ongoing and it would be inappropriate to comment further at this stage."
Shadow defence secretary Jim Murphy said: "The Prime Minister appears to have finally done the right thing. If true, this is a retreat from a inevitable defeat in Parliament in the face of real anger from forces families and MPs.
"For months ministers have stuck their heads in the sand and denied the military covenant should be enshrined in law. I hope this marks the beginnings of a real reassessment of how the Government is treating our armed forces.
"This is an issue the Labour Party and charities have been campaigning on for months and I would like to congratulate the Royal British Legion for securing a policy which will give vital protection for service personnel and their families.
"We will now wait to hear the detail and will want to ensure that the principles of the covenant are being properly set out in law.
"The Government has handled this appallingly and their broken promises have tarnished their credibility on defence. I hope that from this episode they will learn to listen more regularly to the armed forces community."Reuse content