Ed Miliband has welcomed the overwhelming support of Labour's ruling National Executive Committee for plans to reform the party's links with the trade unions and change the way future leaders are chosen.
There were only two votes against and one abstention at the NEC meeting in Westminster, which backed the proposals in a report drawn up by former Labour and union official Lord Collins.
Mr Miliband, who launched a drive for reform in the wake of last year's controversy over the selection of an election candidate in Falkirk, said he was "delighted" by the backing of the NEC, which brings together senior Labour MPs, officials, union leaders and representatives of the party membership. The package will now be voted on at a special conference on March 1.
If approved, these reforms will give union members a positive choice over whether they opt into paying affiliation fees to the Labour Party, together with an opportunity to become affiliated members of the party with the right to vote in leadership elections.
The "electoral college" for leadership votes would be scrapped in favour of a one-member one-vote system. And London members will be offered a primary election to choose the party's candidate for mayor.
Mr Miliband said: "I am delighted that these historic reforms have cleared the first hurdle to being agreed.
"For too long politics has been out of touch with working people and people from all walks of life. These changes will help bridge the gap between Westminster and the rest of Britain.
"They are about opening up the Labour Party so that more people from every walk of life can have more say on the issues which matter to them most like the cost-of-living crisis.
"But we are not taking anything for granted. Change is difficult and these are the biggest changes in the way politics is done for generations.
"Some people will find change difficult to accept. Others are worried about the consequences. But at the Parliamentary Labour Party last night, the Shadow Cabinet this morning, and the NEC this afternoon, there was a strong consensus that change must come.
"Because we must have the courage to change our party and change our politics if we are to change our country once again.
"Over the next four weeks, we will be taking these proposals out around the country to win the case for change. So that together we can build a genuinely One Nation Labour Party based on the principle of one member, one vote."
A Labour source said 28 members of the NEC supported the proposals, with veteran left-winger Dennis Skinner and Christine Shawcroft voting against them.
As well as full members of the Labour Party, trade unionists who become affiliated supporters and people who pay a fee to become "registered supporters" will be eligible to vote in leadership contests and, in the capital, the London primary.
The changes to an opt-in system for existing trade union members will be phased in over five years, but all new members will be asked whether they wish to have their political levy go to Labour.
The party conference, where affiliated organisations including unions enjoy a 50% share of the vote, will remain unchanged for at least five years until the effect of the changes can be assessed.
The party hopes that the new affiliated trade unionists and registered supporters, who have given their personal details to the party, will provide a source of income to Labour to help make up for a shortfall in funding from the unions as a result of the changes.
Sources acknowledged there would be "a financial hit" and it has been estimated that Labour could lose £4 million from union members declining to opt in to the new arrangement.
"We want to get to a place where we grow the number of our small donors who give small amounts of money. They are already our biggest single source of income," a source said.
"We want to grow that base even more, we think the affiliated supporters scheme and the registered supporters scheme ... that gives us a real opportunity to do so because we will have their personal details, we will have their contact details."
But plans to reduce the influence of unions on candidate-selection procedures, by limiting to £50 the amount third parties can spend on supporting their favoured candidate, have been shelved, although the party insisted that there would be a cap put in place.
The source said: "There was a debate about that today. There was a view that £50 was very low and might disadvantage working-class candidates against someone who had their own personal wealth.
"We are looking at that. We do recognise, though, that there needs to be a spending cap."
The reform package was prompted by allegations of ballot-rigging in the selection of a candidate to stand in Falkirk.
The Guardian published a leaked copy of the internal report into alleged voting irregularities by the Unite union in the constituency, which Mr Miliband has declined to publish.
Karie Murphy, the Unite-backed candidate who was forced to quit the race to be party's general election candidate in the seat, told the newspaper it showed that "none of the allegations were supported by evidence".