The draft legislation has been criticised both inside France and abroad for stigmatising Muslims and giving the state new powers to limit speech and religious groups.
"The adoption of this law, which is openly in contradiction of human rights, freedom of religion and European values, will be a guillotine blow inflicted on French democracy," said Erdogan in a speech in Ankara, AFP reported.
The current version of the planned law would only serve the cause of extremism, putting NGOs under pressure and "forcing young people to choose between their beliefs and their education", he added.
"We call on the French authorities, and first of all President (Emmanuel) Macron, to act sensibly," he continued. "We expect a rapid withdrawal of this bill."
Erdogan also said he was ready to work with France on security issues and integration, but relations between the two leaders have been strained for some time.
France's government is in the process of passing new legislation to crack down on what it has termed "Islamist separatism", which would give the state more power to vet and disband religious groups judged to be threats to the nation.
Erdogan has already denounced the proposed measures as "anti-Muslim".
Last October, Erdogan questioned Macron's "mental health", accusing him of waging a "campaign of hatred" against Islam, after the French president defended the right of cartoonists to caricature the prophet Mohammed.
The two countries are also at odds on a number of other issues, including Libya, Syria and the eastern Mediterranean.
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