The 1983 Mental Health Act would be scrapped and replaced with new laws governing treatment, under Conservative plans for England and Wales.
The Equalities Act would also be reformed to tackle discrimination against people with mental health problems, the party has pledged.
The party is also promising 10,000 more staff working in NHS mental health treatment by 2020.
Labour said the Tories appeared to be offering no extra funding.
The Conservatives say the plans are motivated by the concern that "vulnerable people are being subject to detention, including in police cells, unnecessarily" as numbers of people detained or "sectioned" under the Mental Health Act have risen.
The charity Mind has previously called for a review of the Act, which allows people with mental health problems to be detained for treatment against their will.
People detained under section two of the Act cannot refuse hospital treatment - although some forms of treatment can be given only with a patient's consent - and can be held for up to 28 days.
Paul Farmer, Mind's chief executive said: "One in four of us will experience a mental health problem each year, so every parliamentary candidate from every party needs to accept and embrace mental health as a key issue for their constituency."
The charity said a rising number of detentions under the Act could be sign of growing pressure on mental health services.
Labour accused the Tory government of failing mental health patients.
Shadow mental health minister Barbara Keeley said: "The Tories have not delivered on their promise to give mental health the same priority as physical health.
"They appear to be offering no extra funding and have consistently raided mental health budgets over the last seven years.
"Warm words from the Tories will not help to tackle the injustice of unequal treatment in mental health."Image copyright JEFF OVERS / BBC Image caption Theresa May speaks outside Number 10 on her first day in office
Prime Minister Theresa May said: "On my first day in Downing Street last July, I described shortfalls in mental health services as one of the burning injustices in our country.
"Today I am pledging to rip up the 1983 Act and introduce in its place a new law which finally confronts the discrimination and unnecessary detention that takes place too often."
The plans would also see all primary and secondary schools in England and Wales provided with mental health first aid training for staff.
Large organisations would be required to have mental health first aid-trained staff on hand, in addition to the current requirement for physical health first aid training.
Liberal Democrat health spokesman, and former health minister, Norman Lamb said: "I proposed reforms to the Mental Health Act in a Green Paper in March 2015.
"It was designed to give new rights to people. The Conservatives have sat on it for two years, so forgive me if I have little faith in their desire to reform."
He added: "The Conservatives have set themselves against any tax rise so the promise to employ 10,000 additional staff is based on thin air."
The Conservative Party said "funding for mental health services is currently at record levels - and up by £1.4 billion in real terms by 2020."