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Egypt's President Hosni Mubarak has asked parliament to change the constitution to allow multiple candidates in presidential polls, reports BBC.
In a move which surprised observers, Mubarak said this was aimed at bringing the law "in line with this stage of our nation's history".
The amendment is to be put to a vote before September's presidential poll.
Currently, Egypt holds presidential referendums on a single candidate approved by parliament.
Mubarak's National Democratic Party has dominated the assembly since political parties were restored in the 1970s and he was expected to use the system to secure a fifth six-year term in September.
The US has been pressing for democratic reform in the Middle East, including in close allied countries like Egypt and Saudi Arabia.
Inside Egypt, there have been many calls recently by the opposition and civil society for political reform.
"This morning I have asked the parliament and the Shura Council to amend Article 76 of the constitution, which deals with the election of the president to discuss it and suggest the appropriate amendment to be in line with this stage of our nation's history," Mubarak said in his speech, carried live on state television.
He said he wanted "to give the opportunity to political parties to enter the presidential elections and provide guarantees that allow more than one candidate to be put forward to the presidency".
Until Saturday's surprise announcement, Mubarak had ruled out constitutional change.
The government and opposition parties had only a few days ago agreed to postpone discussing the constitution until next year.
A meeting in Cairo of G8 and Arab foreign ministers was recently cancelled because it was expected to raise sensitive issues about reforms in Egypt.
But the president will now be able to silence his critics, our correspondent says.
She says it is unlikely that any candidate from an opposition party will be able to win against Mubarak in the short term.
A feminist author and doctor, Nawal Saadawi, announced last year that she would stand for election - but at the time there seemed no way her candidacy could go forward.
Hosni Mubarak is Egypt's longest-serving ruler since Muhammad Ali in the early 19th Century and one of the longest-serving leaders in the Arab world.
He succeeded President Anwar Sadat, who was assassinated in 1981, and was re-elected in 1987, 1993 and 1999.
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