The law would see anyone found guilty of forcing a woman to wear a niqab or burqa punished with up to three years in jail.
It is widely seen as an attempt to calm the heated debate on whether Switzerland should ban all face veils in public.
In May, the Danish parliament passed a law banning the Islamic full-face veil in public spaces and earlier this week The Netherlands followed suit putting an ban on 'face covering clothing'.
But the Swiss cabinet does not want a nationwide ban, and has said it should be up to the individuals whether or not they would outlaw religious veils in public.
In a meeting on Wednesday, the cabinet said: "The government is aware that facial coverings can lead to problems.
"With its proposals it suggests targeted and specific legal measures in areas in which it has authority.
"The initiative would make it impossible to take into account the individual cantons' differing sensitivities, in particular removing their ability to determine for themselves how they wish to treat tourists from Arab states who wear facial coverings."
But, a nationwide face veil ban will come to a binding referendum in Switzerland, after activists from a group called 'Yes to a Mask Ban' collected the more than the 100,000 signatures required to put the proposal to a vote.
Anian Liebrand, a Swiss campaign leader, said: "Facial coverings are a symbol of radical Islam that have nothing to do with religious freedom but are rather an expression of the oppression of women.
"In Switzerland, we show our faces when we talk to each other."
The Dutch government's Upper House of parliament passed a law banning the wearing of face-covering veils on Tuesday.
The ban means that face covering clothing will no longer be permitted in all public buildings, such as schools, hospitals, and public transport. The ban does not include the hijab, which does not cover the whole face.
Geert Wilders, a far-right politician who is the founder and leader of the Freedom Party, hailed this as a victory, having campaigned for such a ban for more than a decade.
Geert Wilders. Credit: PA
Freedom Party senator Marjolein Faber said that it was "a historical day because this is the first step to de-Islamize the Netherlands."
She added: "This is the first step and the next step is to close all the mosques in the Netherlands."
Anyone found to be breaking the ban in The Netherlands could be fined €400 (£352/$459).
Featured Image Credit: PA