Shops in England and Wales could be allowed to open for longer on Sundays, under plans to be unveiled by Chancellor George Osborne.
The proposal expected in Wednesday's Budget could give elected mayors and councils powers to relax laws locally if it might boost economic activity.
Current laws allows smaller shops to open all day, but restrict those over 280 sq m (3,000 sq ft) to six hours.
The Association of Convenience Stores said some small shops could struggle.
The Treasury pointed to research by the New West End Company - which represents more than 600 businesses in London - that suggested two extra hours of Sunday trading could create nearly 3,000 jobs in the capital.
It said such a move would also generate more than £200m a year in additional sales in London.
Olympic Games trial
The proposal comes after larger stores and supermarkets were allowed to open for longer on Sundays during the 2012 London Olympic and Paralympic Games.
Mr Osborne said decisions on similar relaxations of the law should be taken at a local level - if officials thought longer opening hours would boost economies.
The chancellor said there was a "growing appetite" for shopping on a Sunday.
"There is some evidence that transactions for Sunday shopping are actually growing faster than those for Saturday.
"The rise of online shopping, which people can do round the clock, also means more retailers want to be able to compete by opening for longer at the weekend.
"But this won't be right for every area, so I want to devolve the power to make this decision to mayors and local authorities," he added.
Analysis by Robin Brant, BBC political correspondent
Anna Soubry is on a mission to cheer up Sundays and her solution is shopping.
The small business minister has been out promoting the case for extending opening hours and sharing her recollection of what the seventh day used to be like 'chez Soubry'.
It was the most "miserable" day of the week and as far as she is concerned it was a myth that families came together on the day of rest.
Yes, she knows some people like to go to church and switch off but she thinks more flexible retail options will brighten up Sundays.
There are also the new jobs and flexibility it will bring too for people who work funny hours, like her, she says.
It is not the answer to everything, though.
She told me food shopping in a supermarket can be "depressing", and that seemed to apply to any day of the week.
Small Business Minister Anna Soubry told the BBC the government would consult on the proposal first.
But she said she thought it was a good idea, telling Radio 4's Today programme it was "about giving local authorities the ability to determine what they do in their local area".
She said: "I want to listen to what the unions have to say and obviously I'm concerned if they say it will put pressure on workers.
"But I don't think they are right, actually. This is all about devolving power down to local authorities who are more than capable of being able to make a decision that suits their area."
Ms Soubry also warned against "harking back to a world that probably didn't exist... we are of that generation where Sunday, truthfully, was the most miserable day of the week".
"The only thing to look forward to was Sing Something Simple on the radio. Goodness me, if that didn't sum up a miserable Sunday."
Sunday shopping law across the UK
In England and Wales, the Sunday trading law applies to shops over 280 sq m. They can open on Sundays but only for six consecutive hours between 10:00 and 18:00, and must close on Easter Sunday and on Christmas Day.
In Northern Ireland a 1997 law "removed the restrictions on the goods which may be sold in shops on Sunday", allowed small shops (under 280 sq m) to trade any time on Sunday and allowed big shops to trade for a maximum of five hours between 13:00 and 18:00.
In Scotland there are no restrictions and shops often open for long hours on Sundays.
High Street shops have been coming under growing pressure from online retailers, which now account for 11% of retail sales overall - rising to 17% in the month before Christmas of last year.
A review of the 1994 Sunday Trading Act by the then Labour government in 2006 resulted in no change to the law.
The Bishop of St Albans, the Right Reverend Alan Smith - who speaks for the Church of England on the economy in the House of Lords - criticised the proposals.
He told BBC Radio 4's The World at One programme it was important to "balance the rights of those who want to go shopping with those who find themselves having to work on Sunday when they don't want to".
"We have to make some quite big decisions... about what sort of society we have," he added.
Bishop Smith said giving local authorities the power to set hours for their areas was "a recipe for disaster", because people visiting different parts of the country "won't know where they stand".
But Conservative MP Philip Davies. the vice chairman of the all-party parliamentary group on retail, said Sunday was the most convenient day of the week for some people to go shopping.
He said the current law was "absurd" because smaller branches of Tesco and Sainsbury's were able to open later but larger stores' hours were restricted.
Welcoming the chancellor's proposal, Adrian Pepper, from the Open Sundays campaign group, said restricting Sunday opening hours "makes no sense".
But Association of Convenience Stores chief executive James Lowman said giving local authorities responsibility for setting Sunday trading hours could lead to "inconsistency and confusion" for businesses and shoppers.
"The short period of time that small stores are open while large stores are shut is a crucial advantage for convenience stores, most of which are owned by small businesses.
"Liberalising Sunday trading hours would make some small stores unviable," he added.
John Hannett, secretary general of shopworkers' union USDAW, said the announcement was disappointing, and the union would campaign against the move.
Meanwhile, campaign group Keep Sundays Special accused the government of a U-turn.
Its spokesman, Michael Trend, said it had received a letter on behalf of David Cameron in April which stated that there were "no plans" to relax the current laws.
Two Labour leadership contenders, Liz Kendall and Andy Burnham, said they would oppose the change.
Ms Kendall said the current law meant that "retailers can trade, customers can shop, and shop workers can spend time with families".
Mr Burnham said in a tweet that Sundays were the only day shop workers could spend time with family.
Green Party leader Natalie Bennett also signalled her opposition to the move, tweeting that the move would be bad for small businesses, people and communities.