Speaking to Aljazeera, minister Hazim Shaalan, said Chalabi would be handed over on arrest to Interpol.
Shaalan said Chalabi was suspected of killing thousands of opposition figures in Arbil, Iraq, and stoking discord between the two main Kurdish parties.
"We will arrest him and hand him over to Interpol. We will arrest him based on facts that he wanted to malign the reputation of the defence ministry," Shaalan said.
Shaalan also said Chalabi would be handed to Interpol over his conviction in absentia by a Jordanian court in 1992 of embezzling millions from Petra Bank, whose 1989 collapse shook Jordan's political and financial system.
Chalabi, who founded and ran the bank during a long period when he lived in the country, denies any wrongdoing.
"Our measures will start after Eid," Shaalan said.
Chalabi invited the wrath of the interim Iraqi authorities after he accused the defence minister of stealing $500 million from the ministry and posted documents on a website accusing him of links to Saddam Hussein's government.
Chalabi, once a favourite of Washington, was not immediately available for comment.
A US-appointed judge issued a warrant for Chalabi's arrest last year on charges of counterfeiting money, but the charges were dropped in September.