The Policy Council had originally proposed a Union Civile, but legal advice taken as part of its report, due to be debated in December, said it would be fraught with difficulties.
Faced with that and public support for the full-marriage option, the Policy Council, by a majority, has backed down on this option.
The six-week consultation in June saw 90% of respondents agree that Guernsey should be seeking to achieve 'a non-discriminatory equitable system for the legal recognition of committed couples'.
The Policy Council will now look to get States members to agree to introducing same-sex marriage with a provision for faith groups to opt out of same-sex weddings.
It said it was the 'simpler option' and based on similar systems already in place in nearby places, including Jersey and the UK.
Equality Charity Liberate welcomed the States report and said it would address a fundamental inequality in the way the island treated its citizens.