The cabinet on Sunday is expected to approve returning authority to Interior Minister Arye Dery in deciding whether stores may open in Tel Aviv on the Jewish Sabbath.
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The decision would then go to the Knesset for ratification Monday.
The move comes amid the High Court of Justice's criticism this week of alleged foot-dragging by the government; at issue is the full or partial recognition of a Tel Aviv bylaw permitting the opening of 164 supermarkets and kiosks on Shabbat.
If authority is returned to Dery, the state will ask the court for a further extension to let the minister hold hearings before deciding on the issue.
This authority was transferred to the cabinet at the end of 2014, when then-Interior Minister Silvan Shalom recused himself due to a conflict of interest.
In a cabinet meeting three weeks ago, ministers from Habayit Hayehudi and two ultra-Orthodox parties Shas and United Torah Judaism expressed opposition to letting businesses operate on the Sabbath. They warned that approval of the Tel Aviv bylaw could set an example for other municipalities.
Dery warned that such permission would force low-wage employees to work on their day of rest. Deputy Attorney General Erez Kaminitz, however, told the cabinet that constitutionally it might be hard defending a sweeping measure prohibiting the opening of a store on Shabbat.
In a letter to Prime Minister Benjamin Netanyahu this month, Dery and the ultra-Orthodox parties' Knesset heads said they would not agree for stores to open on Shabbat.
“We cannot and will not be partners to desecrating and trampling the Sabbath, as would occur if the bylaw were approved," the MKs wrote.
"We demand that the government adopt an unequivocal resolution rejecting this bylaw and upholding the current legal status that forbids commerce on the Sabbath. Such a decision is required out of consideration for the importance of this day.”
In an interview with an Orthodox radio station in September, Dery was more moderate on the issue. “We have no intention to cause unnecessary crises," he said.
"We realize that we don’t live in a country operating under Jewish law, and that the days of the Messiah have not arrived yet a time when the entire nation will understand the essence of the Sabbath.”
When asked if he would close Tel Aviv supermarkets on Shabbat, he said he would not close anything and he had no authority to do so.
The government has been procrastinating for a long time. In 2013 the top court ruled that the municipality must enforce an existing bylaw that prohibited businesses from opening on Shabbat or change it.
In March 2014 city hall approved a new bylaw that allowed the opening of 300 supermarkets and kiosks on the Sabbath; three months later, then-Interior Minister Gideon Sa’ar struck the law down.
The Tel Aviv municipality came out with a new version reducing the 300 to 164. But Sa’ar delayed approval before leaving office, and his successors shunned the matter until it came to the cabinet.
This week High Court President Miriam Naor and justices Esther Hayut and Justice Daphne Barak-Erez criticized the cabinet for foot-dragging. The cabinet said it was waiting for approval of a merger between Tel Aviv and suburb Bat Yam before making a decision, but the judges rejected this argument.