Qatar hosts about two million migrant workers but has - for years - failed to protect their rights under global law.
Kafala ties workers to so-called sponsorship by their employer, meaning they can not move jobs or leave the country without the employer's approval.
The International Labour Organisation (ILO) described the newly announced measures as "a momentous step forward in upholding the rights of migrant workers" and said they were aimed at ending the "kafala" (sponsorship system).
Qatar requires workers to obtain their employers' consent before changing jobs, which rights groups say leaves them open to abuse.
Qatar's government said on Thursday that it had adopted a new minimum wage law and will scrap mandatory exit visas for all workers, part of a broad labour reform programme ahead of its hosting of the 2022 World Cup.
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The ILO said the latest reforms have been agreed unanimously by Qatar's governing council of ministers, and must next pass through the country's advisory ("shura") council, before approval by the emir, Sheik Tamim bin Hamad Al Thani, which it said is expected by January. "The new tranche of laws will bring an end to the kafala system of modern slavery".
Last month, Amnesty published a report called All work, no pay showing how hundreds of migrant workers employed by three construction and cleaning companies in Qatar were forced to return to their home countries penniless because of serious failings in the country's recently-introduced dispute settlement schemes.
Nicholas McGeehan, an advocate for improved human rights in the Gulf, said the announced employment reforms should be greeted with "very cautious optimism" until they are actually passed into law and implemented.
"Any issues or delays with our systems will be addressed comprehensively".
"We recognise that an evidence-based minimum wage, the first of its kind in the Middle East, will be a major improvement for workers, and will guarantee a minimum level of protection. We urge the government to announce the new rate as quickly as possible".
Italy on Thursday welcomed Qatar's announcement that it has agreed to introduce a minium wage for migrant workers and to abolish the hated "kafala" system that stops them changing jobs or going overseas.