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The move includes lifting the illegal status of copying purchased CDs and DVDs to a different format for use on a laptop or MP3 player.
Business Secretary Vince Cable backed the proposals, calling the country's current restrictions "archaic", reports Sky News.
The new laws will allow consumers to transfer music or film material and make extra copies for their immediate family's personal use.
Copyright lawyer Adam Morallee agreed with the proposed plans, saying that the law is merely catching up with what is already in practice.
"It really does have to catch up and look at what's happening. The people who operate the fast sharing sites are miles ahead of the where the legislators are," he said.
Sharing copied data across the internet would remain an illegal act of piracy under the new legislation.
However, Jonathan Shalit, chairman of Roar Global which represent artists such as N-Dubz and Jamelia, suggested that the plans will cause problems for the music industry.
"The minute you say it is legal to copy something you're then legitimising it and where does the barrier or boundaries of immediate family end?" he said.
"I think it has not been well thought through and a lack of respect remains for artists who create the original product."
It is widely hoped that the new laws will benefit the UK economy as consumers will be able to legally back up their media to new online storage content services like those offered by Apple, Amazon and Google.
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