Schools with Classes 1 to 12 charging over Rs 20,000 per annum as fees will come under its ambit.
"Once the ordinance is notified, the new rules will come into effect from the present academic session (2018-19) prohibiting schools from raising fees arbitrarily," he told PTI in an interview here.
Sharma, also holds the education portfolio.
He said that in case schools want to hike fees, they will have to consult a regulatory committee headed by a divisional commissioner.
The panel will also have representatives of parents and school management as members, he said.
The new legislation will cover all private schools. However, pre-schools have been kept outside its ambit, Sharma said.
There will be a check that schools do not hike fees by more than seven to eight per cent, and it can do so after taking permission from the committee, based on the consumer price index and increase in salaries of staff, among others, he said.
The draft of the ordinance, which was approved at a meeting of the state cabinet, seeks to tighten the noose around schools charging hefty fees, the deputy chief minister said.
"We are committed to stop harassment of parents and arbitrary increase in fees by private self-financed schools," Sharma said, explaining the salient features of the measure.
He said, "After the governor's assent, a notification will be issued and it will be implemented immediately in letter and spirit."
On the need for such a legislation, Sharma said, "Education, which was a service earlier, has now become a business. Parents are exploited after their wards get admission."
"Not only books, but uniforms, shoes and socks are sold by schools or parents are forced to buy these from a certain shop. Our government is committed to check all these wrong practice," he said.
The first meeting to prepare the draft was held in May last year after which "we met representatives of CII, FICCI, all-India association of private schools, various associations from Punjab, Delhi, Haryana and other states", Sharma said.
"We also sought suggestions and even got 134 objections, which were taken note of while preparing the draft," he said
"Legal options were also explored and advice of former high court judges was also taken to avoid any legal loopholes. The draft was sent to the personnel department, considered by finance department and then the law department studied it," the deputy chief minister said.
"Finally a committee headed by the chief secretary okayed it, before it was presented before the cabinet," Sharma said, adding that the measure was welcomed by parents all over the state.
"Many a times the meetings ran late into the night, even till 2 AM. All objections were discussed to make it flawless, considering the fact that it was going to be a historic initiative in the interest of parents," he said.
On what action would be taken against schools for flouting the rules, he said, "A fine of Rs 100,000 and Rs 500,000 will be levied on schools for their first and second violations, respectively, while a school will be de-recognised in case it repeats the mistake."
Now schools will have to put income generated from commercial activities such as giving its premises for marriage and other functions under the development category, Sharma said.
The funds will be spent on increasing teachers salaries and facilities in the school, he said
"Till now, schools used such income in the commercial head and schools did not get any benefit from them (in the form of development). Also, we could not stop them from commercial use so we decided to insert a clause asking them to show such income in school development fund," he said.
The government has kept a four-point agenda in mind that includes "happy teacher, tension-free students, copying-free examinations and quality education", he said.
In Uttar Pradesh, of the total only 15 per cent schools are government-run, while rest 85 per cent schools are privately managed and these will be covered through this new law, he said.
The unaided private school association is, however, against this "government control" and has given a call for closure of all schools tomorrow to protest the move.