The Turnbull government is poised to make an announcement on race hate laws abolishing the words "insult" and "offend" after cabinet signed off on the decision.
Section 18C of the Racial Discrimination Act makes it an offence to offend, insult, humiliate or intimidate an individual or people based on race.
The changes signed off by cabinet will retain the offences of humiliate and intimidate on the grounds of race, but the higher test of "harass" will replace "insult" and "offend", The Australian reported on Tuesday.
It's expected coalition MPs will discuss changes to the Racial Discrimination Act and the way in which the Human Rights Commission deals with cases when they hold their regular party room meeting in Canberra on Tuesday.
It is understood cabinet received a report on freedom of speech as the first item on its agenda on Monday night, and the matter was dealt with quickly.
Deputy Prime Minister Barnaby Joyce suggested an announcement could be made after the coalition joint party room meeting.
"No doubt something will be brought to the joint party room in due course," he told ABC's Lateline program on Monday night.
"Let's wait for tomorrow and we will have this discussion then."
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Prime Minister Malcolm Turnbull has said he was working on a response to a parliamentary committee's report into freedom of speech, which failed to find a consensus on changing the law but called for changes to the commission's handling of complaints.
Mr Turnbull has been facing calls from within the coalition to water down the laws in the interests of freedom of speech and bringing an end to frivolous complaints.
"Tuesday's party room meeting is a test of Malcolm Turnbull's leadership," Opposition leader Bill Shorten said.
"Will he back the 'right to be a bigot', or will he back modern, multicultural Australia?"
Mr Shorten said if the prime minister walked out of the party room with a policy to weaken the law he would have "sold the last shred of his integrity to hang onto his own job".
Mr Turnbull says the joint standing committee on human rights had written a "very good report" and he was considering its findings.
The committee failed to reach a conclusion on 18C but called for sweeping changes to the operation of the Human Rights Commission, including that it offer reasonable assistance to respondents of complaints.
It also recommended time limits for the handling of complaints, refundable complaint lodgement fees, and an ability for respondents to complaints to apply to terminate the case.
The prime minister on Monday released a new multicultural statement which he said would "renew and reaffirm" Australia's commitment to being a multicultural nation in which racism and discrimination have no place and integration and contribution are core elements.