The Governor General's office says an advisory panel will decide whether to strip Black of the prestigious award.
Spokeswoman Marie-Pierre Belanger told The Canadian Press an 11-member panel will make a recommendation to Gov. Gen. David Johnston. She did not set out a timeline.
Black, 67, was made an officer of the Order of Canada in 1990.
He recently returned to a Florida prison to finish his fraud sentence.
Black had been free on bail for about a year after an appeal court reversed two of his three fraud convictions.
Black's holdings were once worth hundreds of millions of dollars and included control over the Chicago Sun-Times, The Daily Telegraph of London and newspapers across Canada and the United States.
In Canada, Black once owned the former Southam and Hollinger chains, but they were eventually sold off.
Only four people have been removed from the Order of Canada: former NHL Players' Association head Alan Eagleson; controversial Saskatchewan First Nations figure David Ahenakew; disbarred Guelph, Ont., lawyer T. Sher Singh; and, cancer runner Steve Fonyo.
Another of Black's distinctions remains in limbo.
Former prime minister Brian Mulroney elevated him to the Queen's Privy Council for Canada — a rare honour for people who do not hold public office.
No one from the Prime Minister's Office could immediately say if Black will also be expelled from the Privy Council.