Judicial and security sources had earlier said Mubarak would likely be tried in the Red Sea resort of Sharm el-Sheikh where he is detained and is being treated in hospital for a heart condition.
Egypt's official Al-Akhbar newspaper quoted Justice Minister Abdel Aziz al-Guindi as saying a "place has been allocated in Cairo Expo City in Cairo."
"An auditorium is being prepared to be adequate for hosting the trial of ex-president Hosni Mubarak and his sons," he said, adding "the auditorium will be prepared for the attendance of hundreds of journalists and civil plaintiffs and the families of the martyrs."
He said that the head of Cairo's Court of Cassation, who sets the location of trials, will announce his decision within hours.
Mubarak faces murder and corruption charges along with his sons and his former interior minister. More than 800 people were killed during the 18-day revolt that overthrew the president in February. He was arrested in April.
The state-owned Al-Ahram newspaper reported that the justice minister had appointed a team that included security representatives to assess the feasibility of using the expo grounds for the trial.
Mubarak's two sons, Alaa and Gamal, and his former security chief Habib al-Adli are being held in Cairo's Tora prison, to which the ex-president himself was to be transferred.
But the interior ministry had recommended that he stay in Sharm el-Sheikh because the prison was not equipped to deal with a deterioration of his health.
Doctors in the hospital treating the 83-year-old former strongman said this week that he was abstaining from food and that his health was weak.
Copyright AFP (Agence France-Presse), 2011