Muammar Gaddafi's son and former heir apparent Saif al-Islam will be put on trial inside Libya and there will be a verdict before mid-June, a Libyan official said.
The decision comes despite appeals by rights groups to Libyan authorities to hand him over to the International Criminal Court in The Hague for trial amid fears that he may not get a fair trial in Libya.
A trial in the capital Tripoli would however mark a small step forward for the central government, which has been struggling to unify the country under its authority since Muammar Gaddafi's capture and killing last year.
Saif al-Islam had been held until now by his captors, ex-rebels from the town of Zintan, one of dozens of militias across the country operating outside government control. For months, the Zintan militia refused to give him up to Tripoli's officials.
Spokesman of the ruling National Transitional Council Mohammed al-Hareizi said that Saif al-Islam would be transferred to Tripoli within 10 days and that his trial would conclude before parliamentary elections scheduled two months from now.
It was not immediately clear if he would be tried in a military court, where there is no appeal.
"He will be tried for rape, murder, corruption and we expect him to be tried and a verdict rendered before the upcoming elections in mid-June," Mr al-Hareizi told reporters in Tripoli.
No timeframe was given for when his trial would begin, but Mr al-Hareizi said the trial could start as early as this month.
Saif al-Islam staunchly backed his father in his brutal crackdown on rebels in the regime's final days, warning of "rivers of blood" if demonstrators refused to accept government offers of reform.
The eight-month civil war, which began with protests inspired by successful revolts in Libya's neighbours Tunisia and Egypt, left thousands of people dead.
Saif al-Islam was captured in the southern desert of Libya in November by revolutionary fighters from Zintan. They have kept him in a secret location in the western Libyan town ever since as the government negotiated for his handover.
Zintan military council spokesman Hassan Jwaili confirmed yesterday that they would hand Saif al-Islam over to authorities in Tripoli "some time this week with no conditions".
Gaddafi, Saif al-Islam and former military intelligence chief Abdullah al-Senussi were named in arrest warrants the ICC issued in June for attacks against unarmed civilians in Benghazi, Tripoli, and other parts of Libya in February.
The ICC said it was itself investigating numerous allegations of sexual violence by Gaddafi's forces, and there are allegations that rape was used during the uprising to quell dissent.
Rights groups say that Gaddafi should face an international tribunal. Ex-rebels who suffered at the regime's hands have shown little regard for due process, and the murky circumstances surrounding the deaths of Gaddafi and another son, Muatassim, on October 20, and the decision to lay their bodies out for public viewing, drew widespread criticism.
Libyan officials however insist that they will be the ones to try Gaddafi.
Saif al-Islam "has to be tried in Libya where it's a well-known fact that he has committed more crimes against the Libyan people than he did to others", the NTC spokesman said.
"It's a priority to try him under the Libyan law by Libyan judges on Libyan soil," Mr al-Hareizi said, adding that authorities were taking necessary measures to ensure a fair trial.