Proceedings against Michel Bagaragaza would make Norway the second country outside Africa - after Belgium - to take legal proceedings against a Rwandan genocide suspect, UN diplomats said.
"I can confirm that Norway has accepted," Alex Obote Odora, a senior official at the Tanzania-based International Criminal Tribunal for Rwanda (ICTR), told Reuters.
Bagaragaza, who gave himself up last August, was facing three genocide counts at the court in the northern Tanzanian town of Arusha, set up to try suspected ringleaders of the slaughter of some 800,000 people.
Bagaragaza, who has pleaded not guilty, is believed to be held at The Hague.
The genocide spread instability throughout the Great Lakes region. The rest of the world saw what was happening but failed to stop it.
"I can confirm that Norway has accepted"
Alex Obote Odora, a senior ICTR official
ICTR prosecutors in Arusha are under pressure to clear a backlog of cases in the next few years and believe that European nations might be able to help them, analysts and diplomats have said.
A statement from the court on Wednesday said: "The prosecutor argues that transfer of cases to national jurisdictions other than Rwanda will provide for wider understanding of how genocide can happen."
The ICTR said genocide was not listed as a specific crime in Norwegian law so Bagaragaza was likely to be prosecuted "as an accessory to homicide" if his transfer went ahead. That would carry a maximum sentence of 21 years in prison.
Obote said the trial would begin soon after the administrative procedures were completed.
ICTR is under pressure to clear
genocide cases at the earliest
"We are satisfied that the trial will be free and fair," he said.
Bagaragaza was director-general of Rwanda's tea industry regulator during the three-month slaughter of Tutsis and moderate Hutus.
The ICTR said he had reached an agreement with the prosecution and "given an extensive signed statement that details his knowledge of relevant events in Rwanda and his own involvement in those events".
Prosecution in Norway would also help to "counter the voices that deny that there was genocide in Rwanda in 1994 or dismiss it as a spontaneous eruption of inter-ethnic violence", the court said.
Bagaragaza is accused of leading a unit of the Interahamwe, a Hutu paramilitary group that carried out many of the killings usually using crude weapons such as machetes.
He allegedly ordered tea factory employees to provide the Interahamwe with fuel for vehicles, arms and ammunition from a stockpile at the factory and ordered factory personnel to assist them in killing hundreds of Tutsi.
The ICTR statement said Bagaragaza had agreed in principle to the transfer to Norway provided he continued to receive assistance from his current defence team.