NEW YORK, June 3 (Reuters) - A groundbreaking proposal to fight corruption in Albany would require extensive new disclosures from law firms and lawmakers whose clients seek to do business with New York's state government.

Governor Andrew Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver announced a three-way ethics agreement on Friday after months of negotiations between the executive and legislative branches.

The proposal is scheduled to go before the legislature for a final vote before the session ends on June 20.

"This bill is the tough and aggressive approach we need," Cuomo said in a statement. "Government does not work without the trust of the people -- and this ethics overhaul is an important step in restoring that trust."

Under current law, lawmakers who also serve as consultants have been required to turn over certain information about their clients and outside income.

But the disclosure rules have never extended to the approximately 17 percent of Albany lawmakers who also work as lawyers, according to a recent task force report from the New York City Bar Association. Legislator-attorneys in New York only have to give a general sense of the activities they undertake outside their public offices, but names and income amounts are not included.

The Clean Up Albany Act of 2011 would set up a new independent Joint Commission on Public Ethics with broad enforcement power to investigate breaches of law and ethics by members of both the executive and legislative branches, replacing the self-policing bodies that formerly kept watch over lawmakers.

The commission would enforce extensive new financial disclosure requirements, expanded to include all public state officials. Among those disclosures, officials would have to include their legal and lobbying clients that do business with the state ranging from companies seeking state contracts to those embroiled in administrative proceedings with state agencies.

In addition to the names of their clients and their firms' clients, officials would be required to disclose which clients they brought into a particular firm, and how much income they make from those outside clients. While current law mandates a broad disclosure of fees over a certain amount, the proposal would fine-tune those disclosures to make it easier to discern the dollar amount of lawmakers' outside income.

GOVERNMENT LIST

The state government would also maintain a list of all individuals or firms that appear in a representative capacity before any governmental entity, from contracting to judicial and quasi-judicial proceedings.

The reported information would be compiled and made publicly available in a new state-run database.

The proposal also would increase the penalties for ethical violations and crimes tied to public offices.

In the past, opponents to the new disclosure rules have argued they might breach attorney-client privilege. The deal struck on Friday allows some minor exceptions for privileged communication between attorneys and their clients, but does not shield client names or fees generally.

Stephen Younger, the immediate past president of the New York State Bar Association, hailed the deal as a historic moment for the state.

The bar association believes the deal is a "carefully balanced agreement that will enhance the information that the public needs to know while helping make sure we still have lawyer-legislators as a part of our government."

Samuel Seymour, the president of the New York City Bar Association, said his group would have preferred an even more extensive disclosure regime but felt generally that "this approach will provide meaningful information with which the public can examine legislators' outside activities in relation to what their responsibilities are to the people of this state."

(Reporting by Jessica Dye)