Private airports in India will be freed from all government restrictions except air traffic control and security, a government spokesman said.
The decision is expected to speed up construction of a new airport with the help of foreign firms in the Indian technology hub of Bangalore and a similar project in Hyderabad.
"Greenfield airports with majority private-sector participation will have an independent status except for air traffic control and security," he said.
To facilitate this, the Union Cabinet approved late on Tuesday a comprehensive amendment to the Airports Authority of India Act, 1994, he said.
In Bangalore, the contract to build an international airport has been awarded to a consortium led by German engineering group Siemens. It also includes Indian construction giant Larsen and Toubro.
The contract for the Bangalore airport was signed early last year but local officials say the $230-million project has been held up because Indian laws did not allow private firms to build and run airports in a liberalised regime.
The spokesman said the new law would also facilitate the implementation of financial packages proposed for the new airports. He did not elaborate.
He said details would be available after the Bill to amend the Airports Authority of India Act is introduced in Parliament.