The city government will bring an amendment to the Agricultural Produce Marketing Committee (APMC) Act for facilitating direct purchase of produce from farmers by multi-national retailers.
The amendment to the existing legislation will allow direct connectivity between retailers and farmers.
As per the existing provision, farmers cannot sell their produce directly to retailers as it has to be routed through the wholesale market which are mostly under the grip of middlemen.
Officials said the amendment to APMC Act was required to "break monopoly" of the wholesale traders so that retailers can directly buy agricultural produce from farmers.
To break the monopoly of Azadpur mandi, considered one of the largest fruit and vegetable wholesale markets in Asia, the government is also considering allowing private market yards for marketing of farm produce.
The officials said the amendment bill has already been drafted and it will be examined by the Cabinet in a day or two.
"The bill is likely to be tabled in the Winter session of the House," said Mukesh Sharma, Parliamentary Secretary to Chief Minister Sheila Dikshit.
Ms Dikshit, who has been strongly backing the Centre's decision to allow FDI in multi-brand retail, said it will be implemented in the city by early next year.
Officials said government was considering setting up a wholesale market in Tikri Khud area in West Delhi where it has around 72 acres of land. They said government is likely to allow foreign retail giants to set up shop in the area.