It will then have to be approved by Venezuelans in a national referendum.
Besides ending presidential term limits, the reform package includes a curb on central bank autonomy.
The current charter bars Chavez from contesting the presidency in 2012.
Critics say the proposed changes are to expand his power and extend his tenure.
Gerardo Blyde, an opposition leader and former legislator, said: "Chavez is seeking to reduce the territory held by the opposition and give his intention to remain in power a legal foundation."
He said many other reforms are likely to be "red capes" like those used by a bullfighter "to distract Venezuelans from his real objective".
But during his speech in the National Assembly late on Wednesday, Chavez denied seeking lifelong power.
"They accuse me of making plans to be in power forever or to concentrate power. We know it isn't like that. It's power of the people," Chavez said.
"So many lies in the world. I doubt there is any country on this planet with a democracy more alive than the one we enjoy in Venezuela today."
Al Jazeera's Mariana Sanchez reporting from Caracas on Wednesday said Chavez told Venezuelans that this would be the first time that they would be able to participate in the making of a constitution.
She said that while neighbouring countries may balk at Chavez's brand of democracy, Venezuelans were widely expected to back Chavez's charter changes as they saw him as a saviour.
Chavez began his speech by discussing Venezuela's transition to a new society.
"There are 33 articles that starting tomorrow will begin to be read, analysed, criticised," he said, making clear who he expects to oppose him, adding: "We can defeat the forces of [US] imperialism and the servile oligarchy."
In a television interview on Tuesday, Chavez predicted that "the immense majority of Venezuelans" would support his proposed constitutional reforms.
He described the reform as "essential" and the start of a new era towards socialism.
"Tomorrow our great battle begins," he said. "They are going to launch a campaign tomorrow to try to distort the text and the spirit of the proposal."
Earlier in Washington, Sean McCormack, a state department spokesman, said Chavez had already "taken a number of different steps... that have really eroded some of the underpinnings of democracy in Venezuela".
Using powers granted to him by the Assembly January, Chavez has already nationalised key parts of Venezuela's oil, media and utility industries.