If Cameron accepts the invite, he could formally address all the Parliament's MEPs during an upcoming Strasbourg plenary session, or more privately with a select group of senior deputies.
The Parliament Magazine understands that no timetable has so far been set for the meeting and that the format of the discussion has not yet been agreed.
It is the second time this week senior parliamentary figures have called on Cameron to appear in front of the European Parliament.
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On Monday, Guy Verhofstadt, head of the centrist Alliance of Liberals and Democrats for Europe, urged Schulz to invite Cameron.
The call, agreed during a Conference of European Parliament Group Presidents meeting on Thursday, comes as policymakers in Brussels are becoming increasingly frustrated by the lack of transparency in the negotiations between British diplomats and senior European officials.
Verhofstadt emphasised this on Monday stating 'The resolution of the UK problem over the current treaties and the danger of Brexit are still significant… yet nowhere is a public and transparent debate being held.'
The response to Schulz's invite has generated a positive reaction from senior parliamentary figures.
UKIP leader Nigel Farage, who attended the Conference of Presidents meeting and voted in favour of the invitation, welcomed the proposal tweeting, "I'm happy that EP President Martin Schulz will invite David Cameron to address the European Parliament."
Verhofstadt has also welcomed Schulz's measures saying, "I am delighted Cameron will be invited to a special session of the European Parliament" urging Cameron to seize "the opportunity to outline transparently his demands for a renegotiation of the UK's membership."
As Parliaments in Europe and the UK return this week, there is an increasing sense of urgency surrounding the renegotiation effort, amid talk of a referendum being brought forward to 2016.
Separately, in an interview with the Parliament Magazine, Schulz says he wants to help turn the UK's reform debate into one about every EU member state, not just Britain.
"This cannot be a debate about the UK against the rest of the EU. This must be a process at the end of which the British government and equally importantly all other governments say to their people, "this is a bettered EU; this is an EU more able to play a role in addressing the challenges we face today."