Nationalist Prime Minister Viktor Orban, who has been in power since 2010 and won another term in a landslide last year, has appealed to conservative voters by portraying himself as a defender of national interests.
The EU has long accused Orban of undermining democratic freedoms of courts, media, non-governmental organisations and academics - accusations that he has repeatedly dismissed.
His ruling Fidesz party, which has already started campaigning for 2024 European parliament elections, first flagged the so called "sovereignty protection bill" in September.
Orban's chief of staff Gergely Gulyas said on Thursday the draft legislation would be submitted to parliament next Tuesday.
"This office or authority, we shall see what it is called, could probe all sorts of activities ... that would violate the sovereignty of the country," Gulyas told a briefing without elaborating.
A Fidesz lawmaker in September said the new bill could apply to "left-wing journalists, quasi-civil organisations" and political parties.
The EU has put Hungary, alongside Poland, under a probe over rule of law concerns, suspending billions of euros of funding from the bloc.
Orban had earlier passed legislation targeting NGOs that receive foreign funding, notably those financed by liberal billionaire philanthropist George Soros, whom Orban has been accusing of political meddling.
The Court of Justice of the European Union (CJEU) ruled that the law "introduced discriminatory and unjustified restrictions" in breach of fundamental rights, including on personal data protection and freedom of association.
(Reporting by Krisztina Than; Editing by Tomasz Janowski)
