However, the devil is in the detail, with Chief Executive Leung Chun-ying offering no firm proposal and the city's democrats fearing they will be shut out of the poll once Beijing's Communist Party leadership approves an election plan.
Mr Leung's report to the standing committee of the National People's Congress, China's parliament, followed a five-month consultation on democracy in the former British colony that drew nearly 125,000 public submissions.
Hong Kong was returned to China in 1997 with wide-ranging autonomy under the formula of "one country, two systems".
The report said: "Implementing universal suffrage for the Chief Executive's election will be an important milestone of the democratic development of Hong Kong's political system, with significant real impact and historic meaning."
It also appeared to reflect a key concern of Beijing's leadership, saying the people of Hong Kong believed their next leader needed to be "a person who loves the country and loves Hong Kong".
The intensifying debate is split between Beijing officials and their local supporters.