Speaking at a convention on equality on Thursday, the French president said the reform was necessary to ensure women spend less time out of work, which can harm their career prospects, and to encourage second parents - in most cases fathers - to share the burden of parental leave ('congé parental').
In France 'congé parental' can be taken by either parent at the end of maternity leave, but statistics show it is taken up by mothers in 96 percent of cases. This is a figure the government has its sights set on re-balancing.
"Today, less than 4% of those taking parental leave are men," said Hollande. "This means that for the most part, parental leave is for women, but it sometimes ends up working against women, when they cannot find a job again."
Under the proposed changes, parental leave will be reduced from a maximum of three years for parents with two or more children to two and half years. However an additional six months leave can be taken, but only by the father.
For parents with one child, the six months will also be extended to one year, but only if the additional six months is taken by the father.
Someone on parental leave currently receives a maximum allowance of €566 per month.
The question will remain over whether fathers, whose salary is often higher than that of their partners, will be attracted by the idea of giving up work to stay at home and look after their children.
To encourage them to sign up, the French government is to give men financial incentives or "bonuses" by increasing their parental allowance during the six months they are on leave.
Despite the increased ‘bonus’ for fathers and the lengthening of the minimum time for parental leave, the government insists the reform will not cost the government anything.
Further details on the legislation are expected to be announced in May and will form part of a new equality law being put together by the French government.
The changes in the law are not expected to come into force before January 2014 and may even be delayed up to July 2014.