The bill, which was presented by Prime Minister Viktor Orbán's conservative right-wing government Fidesz, has received strong criticism from human rights groups such as Amnesty International and RFSL, as well as Hungarian opposition parties.
Materials that "promote gender identity deviations, gender reassignment and homosexuality may not be made available to persons under the age of 18", reads part of the legal text.
Already last year, Hungarian nationalists wanted to ban a children's book about rabbits that they considered to be homosexual propaganda, and now LGBTQ groups will be prevented from distributing information.
The Hungarian parliament has hammered through several laws that affect the everyday lives of LGBTQ people during the pandemic.
Last year, the Hungarian parliament passed new laws banning same-sex couples from adopting in Hungary and Hungarians from changing gender legally.
"Stigmatizes LGBTQ people"
Gwendoline Delbos-Corfield, French MEP in the Green Group, writes in a statement that Hungarian law is an insult to European values and an attack on fundamental rights.
"Once again, Fidesz uses censorship to stigmatize and turn LGBTQ people into scapegoats."
Article 7 of the EU Treaty is the EU's legal mechanism to act when fundamental EU values are at risk.
Delbos-Corfield believes that Hungary's actions should be highlighted by other Member States during forthcoming Article 7 hearings later this month.
"The witch hunt must stop"
The Hungarian MEP Anna Donath of the Liberal Group RE states in a press release that the law is incompatible with the fundamental values of European democratic societies, as well as the values of Hungarian citizens.
"This is just the latest in many shameful attacks on LGBTQ rights by Viktor Orbán's government.
The stigmatizing witch hunt must end now - homophobia and transphobia have no place in Europe. "
She further writes that "Our group now expects the European Commission to act immediately and unequivocally".