"Our plan calls for a constitutional guarantee of this autonomy, a status that includes the right for a local government elected freely and directly that would include an executive branch and a parliament," Saakashvili said in a speech before parliamentarians of the Council of Europe in Strasbourg on Wednesday.
However, he did not raise the issue of Abkhazia, another separatist republic, saying that "would be of no use".
"They walked out of the negotiations and we no longer have an interlocutor to pursue negotiations," he said, adding that the situation was unacceptable.
Saakashvili said that as far as South Ossetia was concerned, the possibilities he outlined were realistic. He urged the local population there to prompt their politicians to accept the plan.
Abkhazia fought a civil war against Georgia, a former Soviet republic, with the help of Russian mercenaries in the 1990s, and it remains a de facto Russian protectorate.
"They walked out of the negotiations and we no longer have an interlocutor to pursue negotiations"
Both the government and the opposition reject its incorporation into Georgia.
South Ossetia also fought a brief war with Tbilisi in the early 1990s. Moscow has sent peacekeeping troops to the region and has granted most of the region's ethnic Ossetian residents Russian citizenship.
Brought to power by a peaceful "rose revolution" one year ago, Saakashvili has set reuniting his country as his most urgent priority.