Portugal's parliament last Friday approved plans to legalise same-sex marriage but rejected proposals to allow same-sex couples to adopt.
Homosexual acts were illegal in Portugal until as recently as 1982. The country has traditionally been considered one of Europe's most socially conservative countries.
Jose Socrates, the prime minister, said the aim of the legislation was to remedy decades of injustice towards gays.
"I am of a generation - as we all are - which is not proud of the way it treated homosexuals," he was quoted as saying in the media.
"This is a step that will seem completely natural in the near future, in the same way that gender equality, abortion rights and unmarried couples living together are normal now."
Two years ago his government lifted Portugal's ban on abortion, despite church opposition.
The bill will now be reviewed in committee before coming back for a final vote in parliament, and could gain final approval before a visit by Pope Benedict XVI to Portugal in May.
In 2001, a law allowed "civil unions" between same-sex couples which granted them certain legal, tax and property rights. However, it did not allow couples to take their partner's name, inherit their possessions nor their state pension, which is permitted in marriages.