If the current ban by the state Lutheran Church of Norway is not changed, gays would have to hide their sexual preference "for fear of not getting a job," Minister of Families and Children Karita Bekkemellem Orheim said in presenting a report to parliament.
The state church is funded by the government and its employees are technically public servants. If the proposal passes, the church would have to obey.
The proposal was hailed by gay groups, and seems certain to stir debate in the already deeply split national church.
The Lutheran Church, with more than 85 percent of the nation's 4.5 million people as members, has been angrily debating the issue of gay clergy for decades.
In 1997, the church's highest body, the national congress, ruled that clergy who enter homosexual partnerships could not hold consecrated jobs--mainly those positions that involve preaching, such as local pastors, clergy of larger churches and bishops. Last July, the government overrode the church and upheld the employment of the first clergyman to be appointed to a preaching post while openly living in a gay partnership.
It also said parliament should considering withholding financial aid from any religious group that seeks to "cure" homosexuality.
"The government really is serious about homosexual rights," deputy leader Torgeir Svinsaas Einum of the national association of gays and lesbians was quoted as telling the news agency NTB.
The government, which has a minority in parliament, will propose a new law later this year if the majority of the legislature signals support.
Gay rights are already strictly protected in Norway. Homosexuals may serve in the military, for example, and marry with all the rights of heterosexuals except for adopting children and church weddings.
Last year, the Oslo Bishop's Council narrowly voted to employ Jens Torstein Olsen as a minister even though he was openly living with a gay partner. Some council members appealed to the government, which upheld the appointment.
At the time, seven of Norway's 11 Lutheran bishops issued a statement strongly opposing the decision and warning that it could split the church.
Two years ago, lesbian minister Siri Sunde was allowed to return to the pulpit after being barred for entering a gay marriage.