The proposal by Nguyen Anh Tri was announced on the National Assembly's information portal on Tuesday.
Tri was quoted as saying "gender identity" is one's own perception of their gender and might not necessarily match their biological sex or their sexual orientation.
Under international conventions, U.N. member states must respect, protect and bolster human rights without discrimination, including those related to gender identity and orientation, he said.
LGBT people account for 3-7% of the global population, and transgender people for 0.3-0.5%. With Vietnam's population at around 98.5 million as of November 2021, the number of transgender people in the country is estimated at 300,000-500,000.
Tri said a Law on Gender Identity would be compatible with provisions in the Civil Law that allow an individual to reassess their own gender.
But since the latter merely states "Gender changes would be done in accordance with legal regulations" without any amplification, changing one's gender remains hard in practice.
Besides, this means transgender people lack identity documents that reflect their gender and the means for medical intervention and healthcare.
The right to determine one's gender when it is different from the one someone is born with is not considered a right.
Tri pointed out: "It means there are around half a million people without this right. They might even face violations and abuse."
He said the Law on Gender Identity should actualize the rights to change one's gender enshrined in the Civil Law.
It should state that changing one's gender is a basic right of each and every citizen, and help raise public awareness and influence perceptions on gender changes among other goals, he said.
It needs to affirm that the LGBT community is an integral part of society, and that being an LGBT person is not an illness or handicap, he said.
It also needs to create conditions for medical facilities to perform gender change procedures.
Tri plans to submit the bill to the Standing Committee of the National Assembly for consideration and placing on lawmakers' agenda for 2024.
Tri, 63, a doctor and professor, is chairman of the advisory council of Medlatec General Hospital.
He has held a number of senior positions in the past, including that of head of the National Institute of Hematology and Blood Transfusion.