Dennis Edney said Khadr is to be moved to the Bowden Institution near the town of Innisfail, but it is not clear when.
"Mr. Khadr has been reclassified as a medium-security threat and will be eventually transferred to Bowden as a medium (security) prisoner," Edney said Friday.
"He is not presently being transferred, but at some point in the near future we anticipate that he will be transferred to Bowden."
Khadr pleaded guilty in 2010 to five war crimes, including murder, for killing an American soldier in Afghanistan when he was 15.
The 27-year-old is being held at the federal maximum-security prison in Edmonton where he is serving the remainder of an eight-year sentence.
Khadr was transferred to Canada from a U.S. military base in Guantanamo Bay in September 2012.
Last October an Alberta judge turned down his request to be moved to a lower security provincial jail where he would be eligible for rehabilitation programs.
At the time Public Safety Minister Steven Blaney welcomed the court ruling, saying the government of Canada would continue to vigorously defend against any attempt to lessen his punishment.
The Correctional Service of Canada would not confirm Khadr's transfer, citing federal privacy rules.
Bowden Institution is a medium-security prison with a minimum-security annex.
A government website says Bowden Institution encourages inmates to become law-abiding citizens by offering education, employment, and rehabilitation programs.
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