Andy Burnham has vowed to scrap an 'archaic' law banning Catholics from being involved in appointing Church of England bishops.
PMs are usually responsible for advising the monarch on who should get the top posts in the Church, including the Archbishop of Canterbury.
However, Mr Burnham's status as the first openly Catholic incumbent of Downing Street has raised constitutional challenges.
The Roman Catholic Relief Act of 1829 bans him from carrying out those duties.
It states that anyone breaking this law shall be 'deemed guilty of a high misdemeanour, and disabled for ever from holding any office'.
Jews are subject to equivalent restrictions through an 1858 law.
Andy Burnham has vowed to scrap an 'archaic' law banning Catholics from being involved in appointing Church of England bishops
Mr Burnham's status as the first openly Catholic incumbent of Downing Street has raised constitutional challenges over his role advising the King (pictured together)
The quirk is a legacy of centuries of tensions following Henry VIII's split from Rome.
In 1688 Parliament ousted Catholic James II and installed protestant William of Orange in the so-called 'Glorious Revolution'.
The Bill of Rights the following year banned monarchs from being Catholic - a provision that remains in force to this day.
In a written statement to Parliament, Mr Burnham confirmed that he has used the work-around of delegating his duties to the Lord Chancellor, Alex Norris.
But he also announced his intention to change the law, saying it was 'unacceptable for there to be a legislative bar against people of any faith performing all the functions of my office'.
He added: 'The Government will therefore introduce a Bill at the earliest possible opportunity to correct this antiquated and archaic anomaly.'
The PM's role in religious appointments is largely symbolic, with candidates interviewed and selected by a Church committee.
The King is represented in that process by the ecclesiastical secretary to the Crown and Lord Chancellor.
According to official guidance from the Cabinet Office, approval from the premier and the King is only sought 'once a candidate has been chosen and accepted the post'.
PMs are usually responsible for advising the monarch on who should get the top posts in the Church, including the Archbishop of Canterbury (pictured)
Stephen Evans, chief executive of the National Secular Society, welcomed the announcement but called for the Government to go further.
He said: 'These anomalies exist only because government remains entangled with the Church of England. In a modern democracy, the state should have no role in appointing bishops.
'The long-term answer is a clear separation of Church and state.'