Bugging will be allowed on when someone is suspected of a crime worthy of at least a four-year prison sentence, such as terrorism, murder, manslaughter or grand larceny.
The decision to allow secret monitoring is the result of a fiercely contested agreement by the Swedish government with the Liberal Party (Folkpartiet).
The settlement includes many changes from the initial proposal presented by the Swedish government, which received strong criticism from legal authorities.
Changes in the new version include the requirement of a court decision to set up secret listening devices.
A person who has been listened in on must be informed afterward and is eligible to receive damages.
Many locations are prohibited entirely from bugging, including editorial offices, law agencies, physician reception areas and social service offices.
A parliamentary committee is being established to follow the use of secret monitor devices, according to a press release from the Liberal Party.
The Liberal Youth Movement is not pleased with the settlement, and wrote that its parent party has been a doormat for Social Democratic Justice Minister Thomas Bodström.
The proposition will be submitted next week.