The reforms will allow the state's 430,000 householders and small business gas users to choose their own supplier, six years after the state and federal governments signed the 1997 Natural Gas Pipelines Access agreement committing them to deregulation of the industry.
New South Wales, Victoria and the ACT have already deregulated their industries.
Energy Minister Eric Ripper said the legislation would end the existing AlintaGas monopoly and introduce more competition into the gas market by early next year.
"The deregulation of the gas retail market puts power into the hands of the consumers who can take their business where they get the best service and value for money," Ripper said.
The legislation has been constructed to establish a legal framework for a retail market administrator with market rules, and create a retail market scheme to allow customers to transfer between retailers while maintaining service standards.
A marketing code of conduct will also be established under the control of a gas industry ombudsman to resolve complaints.
The Bill will also allow the granting of exclusive gas distribution and trading licences (after a competitive tender) to allow gas to be reticulated to regional communities in the future.
