Finance Minister, Pravin Gordhan, said the transfer of “what is thought to be about $1 billion”, would be done under the terms of the United Nations (UN) Protocol.
The assets are in the form of funds held by local banks as well as gold bullion stored at Johannesburg’s OR Tambo International Airport.
Gordan met with a high-level Libyan Government delegation tasked with locating all assets taken out of Libya by Gaddafi and his aides.
Earlier this month, it was revealed that Gaddafi’s former Chief of Staff, Bashir Saleh, who is on Interpol’s most-wanted list, had surfaced in South Africa.
It appeared he assisted the deposed Libyan leader and his family to stash the money in South Africa.
The official opposition Democratic Alliance said Saleh was spotted at the 5th BRICS summit in Durban earlier this year.
It expressed concern at claims that he is able to fly regularly – without being detained – between South Africa, Swaziland and Niger.
It called for Saleh to be arrested and a full investigation conducted “so that the world knows that South Africa will not allow itself to become a safe haven for international criminals’’.