The European Parliament's Intergroup on Gay and Lesbian Rights congratulated the Commission on what they called "the right decision."
The Parliament has called for such a directive at least on seven occasions in the past eight years.
However the Commission announced in April that opposition from Germany and other member states meant that European Union citizens would not be protected from discrimination on the grounds of sexual orientation.
EU directives are legislation that requires member states to, for example, deal with discrimination, but leaves it up to the states to decide on the best course of action to take.
Earlier this month the European Parliament's all-party social affairs committee voted for a framework directive against all forms of discrimination, despite firm opposition by right-wing MEPs.
Now the Commission has had a change of heart.
"We thank all those who have been involved in the campaign for an all inclusive non-discrimination directive," said Michael Cashman, President of the Intergroup.
"We congratulate the Commission and in particular Commissioner Spidla and President Barroso on doing the right thing.
"As ever the details of the proposal will be keenly awaited and scrutinised.
"And we will work with the Council and Commission to achieve our goal of making Europe a brighter, fairer, equal place to work and to live."