British Prime Minister Theresa May is expected to officially give the go-ahead for the plans drafted by the Joint Committee on the Palace of Westminster, which had been studying the options of bringing the 19th century complex up to modern standards.
The report suggests parliamentarians be relocated to nearby buildings by as 2020 to enable the 4-billion restoration project expected to last up to six years.
It recommends the Department of Health's headquarters for MPs, and Queen Elizabeth II Conference Centre across the road from the Palace to house the Lords temporarily.
Described as the biggest restoration project of its kind, the plan will be subject to a parliamentary vote.
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But the committee has warned that a rejection of its plan could prove a "catastrophic failure" for the site.
"The roofs are leaking. The stonework is rotting. We need to do a great deal more in fire compartmentation. The Victorians left us lots of pictures of statues and all the rest of it but really good plans, so we know where the voids are, we really don't have," said Lord Lisvane, a senior parliamentary official.
Some committee members expect the cost of works to rise higher than the 3.5 billion pounds estimated by management consultancy Deloitte to 3.9 billion pounds.
The most expensive of the options put forward by Deloitte involved MPs remaining in the palace while works took place over 32 years. This was estimated at 5.7 billion pounds, rising to 7.1 billion pounds assuming maximum risk and inflation.
This option was rejected by the committee.
The refurbishment will include replacing heating, ventilation, electrical, water and drainage systems, the installation of fire safety systems and the removal of significant amounts of asbestos, which has limited the ability to undertake conservation and renovation work in the past.
It will also involve repair and enhancement of the palace's 4,000 windows, and extensive conservation and renewal of stonework.
Cast ironwork on the roof will also be restored.
The move of the Commons to Richmond House, the home of the UK's health department, will require a temporary debating chamber, with likely locations being its central courtyard or a new structure outside.