Conservative caucus members were told during their weekly meeting that Chong's Reform Act had received Stephen Harper's stamp of approval, sources told The Canadian Press.
Chong had recently indicated that he was willing to water down some of the bill's most controversial elements.
With the backing of both the government and a wide cross-section of NDP, Liberal and backbench Tories, Chong's private member's bill is expected to pass its next vote in the Commons next week.
"That's when the difficult work starts because we're up against a deadline here, which is the next federal election," said Chong, who would not comment on the government's position.
"My hope is that this bill can get through the House, the committee, third reading and the Senate before the next election and be passed into law."
The Ontario MP is seeking to re-empower members of Parliament by handing them more power to review and even eject party leaders, and to vote on the expulsion and re-admission of caucus members rather than leaving that power to the leader.
He also wants to give riding associations more say over who runs for the parties in each riding, as opposed to giving party leaders the veto.
Chong has spent the past several months discussing his bill with colleagues, and last week published a proposal for softening up some of the elements of the legislation.
The bill cannot be amended at its current stage, but if it successfully reaches a Commons committee there could be agreement for making friendly changes.
Chong is suggesting that instead of laying out specifics for how each party caucus deals with issues such as leadership reviews and the ejection of members, the MPs would be given a chance to vote on a set of rules following each general election.
The parliamentarians could decide to adopt a system, for example, where they have the power to hold a leadership review, but would come up with their own thresholds for how this would be triggered.
"I heard from many members of the Liberal party and the New Democratic Party, and also Conservatives, that said using legislation to impose a uniform set of rules on all party caucuses doesn't take into account unique circumstances and special situations," said Chong.
Chong is also proposing that each party designate the person or entity to approve nominations, rather than making that explicitly a riding association function. That leaves the possibility that the power could still rest with the party leaders.
ALSO ON HUFFPOST: