"I have instructed the IDF (military) to prepare a plan to enable voluntary departure for Gaza residents," Israel Katz said in a statement.
He specified that he had told the army to make preparations that "would allow any Gaza resident who wishes to leave to do so, to any country willing to accept them".
"The plan will include exit options through land crossings, as well as special arrangements for departure by sea and air," Katz added.
The comments came after US President Donald Trump floated a plan to "take over the Gaza Strip", prompting criticism from world leaders and efforts by his administration to walk back the remarks.
Katz said he welcomed "Trump's bold plan, which could allow a large portion of Gaza's population to relocate to various places around the world".
Katz added that the plan could help Gazans who wish to leave "integrate optimally in host countries, and also facilitate the advancement of reconstruction programs for a demilitarised, threat-free Gaza".
Israeli far-right Finance Minister Bezalel Smotrich applauded Katz's move.
"I welcome the Defense Minister's decision to instruct the (Israeli army) to prepare for the implementation of our role in the migration plan and to facilitate the departure of Gazans to receiving countries," Smotrich said in a statement.
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