The Supreme National Commission for de-Baathification said on Monday that a draft law has been prepared which could see thousands of purged Baath Party members reinstated to their jobs.
Ali al-Lami, executive director the de-Baathification commission told the Associated Press the draft law will be sent to the parliament for ratification.
The amendments are in harmony with a 24-point national reconciliation plan that was announced in June by Nuri al-Maliki, the prime minister, in which he called for reviewing the de-Baathification programme, al-Lami said.
Before the amendments were drawn up, the de-Baathification commission listed names of 10,302 senior Baath Party members who were to be fired but the new proposed law includes only 1,500 names, al-Lami said.
Those who will lose their jobs will get retirement pensions, he said.
He said that 7,688 have been fired since the organisation was established in January 2004.
Many Sunni Arabs say that the de-Baathification process was aimed to remove members of their sect, that ruled Iraq for decades until the fall of Saddam, from state institutions.
But al-Lami strongly denied such accusations, saying that more Baathists from the predominantly Shia southern Iraq lost their jobs than in Sunni areas in the centre.
The United States dissolved and banned the formerly ruling Baath party in May 2003, a month after toppling Saddam, but later softened its stance, inviting former high-level officers from the disbanded military to join the security forces.
A court sentenced Saddam to death on Sunday for his role in the killings of 148 Shia residents of the town of Dujail after a failed assassination bid on him in 1982.
Barzan al-Tikriti, Saddam's half-brother and former intelligence chief, was also sentenced to die, as was Awad Ahmed al-Bandar, chairman of the so-called Revolutionary Court that ordered the Dujail executions.