Chile's conservative president proposed civil unions legislation that would give unmarried partners many of the rights now enjoyed only by married couples in the South American nation.
Gays and lesbians lauded Sebastian Pinera's signature on the proposal that he is sending to Congress as a big step toward equality.
But the leaders of Mr Pinera's centre-right coalition were so upset that they refused to attend the signing ceremony.
Chile only legalised divorce in 2004, which is one reason why about two million people live together without legal recognition in the socially conservative country.
Mr Pinera, who fulfilled a campaign promise with the civil union bill, insists the initiative does not change the concept of marriage in conservative Chile, which only recognises marriages between a man and a woman.
But all couples "deserve respect, dignity and the support of state", he said in a speech at the presidential palace that was followed by prolonged applause.
If the bill is approved as written by both houses of congress, then couples who sign "agreements to life as a couple" before a notary or at the civil registry would be able to resolve legal problems with inheritances, social welfare issues and health care benefits.
Leaders of the right-wing Independent Democratic Union and centre-right National Renovation party are already uncomfortable with the project, and some lawmakers said they would try to change or stop the effort. Chile's influential Roman Catholic Church also is opposed.
Gay rights activists are hopeful it will become law.
"There is a majority in congress that believes that couples of the same sex have the same right to be happy as the rest of the couples in our country," said Pablo Simonetti, president of the Equality Foundation.