"Chile is sending a rare signal to the world" with the ruling, The Movement of Homosexual Integration and Liberation (Movilh) said in a statement.
Chile's House of Representatives approved a reform to its adoption law Wednesday that could allow same-sex couples to adopt children.
The text was approved by 104 votes, while 35 were against it, and four abstained, say sources within the House.
The Movement of Homosexual Integration and Liberation (Movilh), one of the most active LGTBQ groups in Chile and an advocate of the initiative, celebrated the approval as "a historic milestone" and issued a statement saying that "Chile is sending a rare signal to the world" with the ruling.
"What happened today is a milestone that shakes from its foundations prejudicial and homophobic barriers that hinder the chances of a child to find the best possible family," said Rolando Jimenez, a long-time Movilh leader.
The organization tweeted that the adoption reform, "ensures the best interests of the adopted child or adolescent, protecting their right to live and develop in a family, whatever its composition."
LGBTQ rights activists in the country are still vying for the legalization of same-sex marriage, though civil unions were approved in 2015 under former President Michelle Bachelet.
The legislation entered Congress in October 2013 but made no progress until June 2018 when the government of Sebastian Piñera reactivated its processing. The initiative was controversial because ruling party conflicts stagnated the measure.
On January 24 of this year, the Family and Senior Adult Commission of the House sent the comprehensive reform proposal to the adoption system in Chile. The bill still has to be debated in the Senate.