Mr Rennie was joined by the Lib Dem’s former UK leader Menzies Campbell, who said the plans offered an alternative to both Scottish independence and the status quo.
Speaking at the General Assembly Hall of the Church of Scotland in Edinburgh, which was the temporary home of the Scottish Parliament from 1999 to 2004, both men launched the ‘Bring Our Country Together’ report, highlighting a series of recommendations for making the machinery of the UK work better.
The report calls on the Westminster Parliament to “renounce the power to unilaterally legislate in devolved areas for any part of the UK” and to make “a formal declaration that the United Kingdom is a federal union that exists by the consent of the people of Scotland, England, Wales and Northern Ireland”.
It states that a federated Britain would require a written constitution - marking an end to the centuries-long reliance on convention and precedent.
The proposals would also “put an end to wasted votes” by electing MPs to Westminster using Single Transferable Vote (SVT) system, and create an elected the House of Lords using proportional representation (PR).
The party also pledged to protect the Supreme Court and create a formal United Kingdom Council of Ministers to “encourage co-operation and respect” between the various devolved governments and Westminster.
Announcing the plans, Willie Rennie said: “After the year we've had we need to bring our country together to put recovery first.
“That applies equally across the UK as within Scotland.
"Our comprehensive package of reforms will give Scotland a bigger say in a changed UK democracy so together we can put recovery first.
"Scottish Liberal Democrats were central to the foundation of the Scottish Parliament, fair votes in council elections and more powers for Holyrood.
“Now we want to go further with federal UK, fair votes for the whole UK, a reformed House of Lords, a written constitution and power devolved across the nations and regions of the UK
"Progressive change is far better than a prolonged and disruptive independence referendum,” he added.
“This is a positive programme for reform for improving our democracy. That’s how we bring our country together.
Menzies Campbell said: “We reject the idea that the only choice is between independence and the status quo.
“The Liberal Democrats argue that for Scotland and the United Kingdom alike a partnership with proper separation of powers among the four nations is the most powerful of constitutional settlements.
“Our objective is a system of government which allows for the expression of different identities and builds additional influence and strength with cooperation and common purpose; which embraces joint action which is necessary and effective; and is based on proportionality and subsidiarity.
“It is clear that only a settlement based on these principles will strengthen our ties with the other nations of the United Kingdom and maintain a union at peace with itself.
“A Scotland which is endowed with these principles can be a guiding light for the rest of the United Kingdom.”
You can read the full Bring Our Country Together report here.