The bill will replace the existing Births, Deaths and Marriages Registration Act to strengthen legal recognition of trans and gender diverse people and better recognise modern family structures, the explanatory notes say.
Conversations with people affected by existing laws revealed a common desire for legal documents to accurately represent identity, Attorney-General Shannon Fentiman said on Friday.
"Without this they face the prospect of outing themselves every time they apply for a job, go for a rental property or enrol in university," she said.
Ms Fentiman recounted the story of "Emily" to parliament during the bill's introduction.
"Whenever I must present my birth certificate, I get anxious (and) worried that the person reading it will think I'm a fraud or ... mentally ill, merely because I know I'm female and yet my birth certificate says I'm a male," she said.
"This legislation will mean I'll get to correct something that has been wrong for 50 years."
The existing law "unnecessarily medicalises" the recognition of a person's identity, and surgery can be inaccessible and unaffordable as it is not covered by Medicare, Ms Fentiman said.
The Bill establishes two pathways to alter the record of sex for a child under 16; through the Children's Court, or with an application to the register by a parent or guardian when particular criteria are met.
"Trans and gender diverse children thrive when they are affirmed for who they are, including on their birth certificate", said Transcend CEO, Jeremy Wiggins.
It also allows greater freedom over their chosen gender descriptors, including non-binary recognition.
Same-sex couples will also be able to register as mother/mother or father/father for the first time.
As it stands, only one person can be registered as a child's mother or father.
The new laws have been welcomed by groups representing LGBTQI people and their families, some of whom were in the public gallery.
"Queensland's current laws are cruel, outdated and out of step with almost every other state and territory in Australia," said Ymania Brown, a Brisbane-based, fa'afafine trans woman and spokesperson for Equality Australia.
"After a long community-led campaign, this significant and long-overdue step to improve the lives of trans and gender diverse Queenslanders is very welcome, and we are urging all MPs to get behind this bill."
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