The university, which would focus on advanced disciplines of education, would be named after late Prime Minister Indira Gandhi, who represented Rae Bareli during a substantive part of her political career.
At present, the constituency is represented by Congress president Sonia Gandhi.
The proposed university would be set up at a cost of Rs 500 crore during the 12th Plan Period.
The expenditure would be met from the Consolidated Fund of India through the University Grants Commission (UGC) under the budgetary provisions of the HRD Ministry.
"Establishment of a Central University for women would have a multiplier effect on availability of empowered women in all walks of life. As a model central university for women, it will create standards of excellence to be followed by others. Such a university will help in the fight to overcome discrimination and change perceptions about what women can and should do," reads the bill.
Of the total of 121 crore population in the country, there are 58.6 crore women.
They constitute 9.5 crore of the population in Uttar Pradesh alone.
Seeking to check discrimination, Clause 7 of the Bill states that the university shall be open to women of whatever cast, creed, race or class "and it shall not be lawful for the university to adopt or impose any test whatsoever of religious belief or profession in order to entitle her to be admitted as a student in the university."