New South Wales is one step closer to allowing same-sex marriage after a parliamentary committee found it can be legislated at a state level.
The findings have been welcomed by a cross-party working group, which described it as "a momentous step forward" for marriage equality.
Premier Barry O'Farrell has previously said he would prefer federal parliament to change the Marriage Act.
But he said he would be prepared to go it alone if the inquiry found the state can act by itself.
He's promised a conscience vote on the issue, with a revised bill expected to be introduced in the next session of parliament.
On Friday, the report from the Social Issues Committee Inquiry found it was constitutionally valid for NSW to legislate on same-sex marriage.
However, it warned such a move could trigger a challenge in the High Court.
The findings put to rest arguments that federal parliament has sole responsibility for marriage equality laws, and that progressing same-sex marriage isn't a matter for the states.
In a statement, the cross-party working group - comprised of MPs from across the political spectrum including Labor, Liberal, the Greens and an independent - welcomed the findings.
"The interest this inquiry has inspired demonstrates the support this issue has across the wider community," the statement said.
The group said it remained committed to marriage equality.
"We will be examining the detail of the report, and will release further comment regarding our bill in the near future," the statement said.
It's hoped the private member's bill will be voted on by the end of the year, making NSW the first Australian state to legalise same-sex marriage.