The draft bill, published by the Scottish Government on Monday ahead of the Holyrood elections in May, states the timing of another referendum will be for the next Scottish Parliament to decide.
In the foreword of the draft bill, constitution secretary Michael Russell says the referendum should be held “within the first half of the next parliamentary term, when it is safe to do so”.
According to recent polling, the next government is most likely going to be led by the SNP with a majority on a knife-edge.
The draft bill also makes plans for the voter franchise to extend to those who can currently vote at Scottish Parliamentary and local government elections, which will see those aged 16 and 17 given the vote.
The publication was released on the same day as the report by James Hamilton, which investigated whether or not the First Minister breached the ministerial code around the Alex Salmond affair.
It also comes after the SNP applied to have ‘indyref2’ on the ballot paper for the May elections.
Mr Russell said the recovery from Covid-19 should be “made by the people who live here” and that there would be “no democratic justification” for blocking a second referendum should a pro-independence majority be returned in May, as polling suggests will be.
He said: “Our top priority will continue to be dealing with the pandemic and keeping the country safe, but we are optimistic that because of the incredible efforts of people across Scotland, better times lie ahead.
“The Scottish Government believes it should be the people living in Scotland who have the right to decide how we recover from the pandemic and what sort of country we wish to build after the crisis.
“If Westminster maintains its control, recent history shows what Scotland can expect – an economic recovery hindered by a hard Brexit that is already taking a significant toll and the continued, systematic undermining of devolution, which is weakening our Parliament’s powers to maintain food and environmental standards and protect the NHS from post-Brexit trade deals.
“Scotland’s recovery should be made by the people who live here and who care most about Scotland. That is why Scotland’s future should be Scotland’s choice.
“It should be for the next Scottish Parliament to decide the timing of the referendum. So that the recovery from the pandemic can be made in Scotland, the Scottish Government believes it should be held in the first half of the new Parliamentary term.
“If there is a majority in the Scottish Parliament after the forthcoming election for an independence referendum, there can be no democratic justification whatsoever for any Westminster government to seek to block a post-pandemic referendum.”
The question of legislative competence – whether the bill would be within the powers of the Scottish Government – is also unanswered by the publication of the draft bill.
A view as to whether it is competent will be provided by the presiding officer when the bill is introduced, but even without a statement of legislative competence, the bill can proceed.
This most recently happened with the EU Continuity Bill, which reached stage three before being struck down in the Supreme Court.
Such a scenario with an independence bill could see the UK Government challenge the legality of the independence bill in court.
A Scottish Parliament spokesperson said: “The Presiding Officer will set out his or her view on legislative competence at the point at which a Bill is to be introduced.”
Reacting, Scottish Conservative leader Douglas Ross said the bill showed the SNP had become “detached from reality”.
He said: "It is beyond the comprehension of most Scots that Nicola Sturgeon considers this to be a priority.
"Scotland continues to be gripped by the global pandemic and even once normality slowly returns, the shockwaves will be felt for years to come.
"The SNP Government is mired in sleaze with nothing left to offer except yet more division and grievance.
“The motivation for this is as much to do with distracting people from the Sturgeon-Salmond scandal
"A responsible government would be entirely focused on Scotland's post-pandemic recovery, but Sturgeon and her ministers have become detached from reality and the priorities of ordinary families.”
Scottish Labour’s constitution spokesperson Colin Smyth said a referendum was “not a priority”.
He said: “The focus for all of Scotland’s politicians should be on bringing the country together and an independence referendum is not a priority at this time.
“Scottish Labour will focus on what unites us, not what divides us.
“In contrast to the SNP and Boris Johnson’s Tories, Scottish Labour will put our national recovery first."
Scottish Liberal Democrat leader Willie Rennie said now was the “wrong moment” to be pushing for a second independence referendum.
He said: "Holy moly, they've had people working on the referendum instead of dealing with the pandemic.
"Dozens of civil servants could have been planning to get cancer services running full speed, but they've been ordered to do this instead. Or they could have been working on getting funds to business, better mental health services or support for schools.
“We are still in a pandemic."
Scottish Greens co-leader Lorna Slater backed the bill, saying: “Scotland’s future must be in the hands of those who live and work in Scotland, and the Scottish Greens are asking people to vote like our future depends on it this May.
"Our manifesto will support a referendum on our shared future, and polls show we may be crucial in ensuring this bill passes.”
But Scottish Secretary Alister Jack described publishing the draft bill as “simply irresponsible”.
“It is a distraction – we need to focus on continuing to tackle the pandemic and rebuilding our economy,” he said.