The Agricultural Land Reform Office (Alro) is giving Palang Pracharath Party MP Pareena Kraikupt seven days to hand over the 682 rai of land in her possession, otherwise it will be confiscated.
The seizure plan was announced by Alro secretary-general Vinaroj Sapsongsuk at a press conference on Friday.
Investigators have confirmed the 682 rai was Sor Por Kor land meant to be given to poor farmers and Ms Pareena had no right to occupy it, Mr Vinaroj said.
"She is a politician and businesswoman, which means she does not fit the definition of a 'poor farmer' who can receive Sor Por Kor land," he said.
Mr Vinaroj said Ms Pareena will be sent a notification to return the land within seven days, adding that the letter should be issued on Monday.
The land will later be allocated to landless farmers, so they can earn a livelihood.
If Ms Pareena refuses to give up the land, Alro will use the authority granted by the former National Council for Peace and Order to seize it, and take criminal action against her, he said.
He added that Alro's investigation into the land was within guidelines laid down by Deputy Agriculture Minister Thamanat Prompow.
"We apply the same standard in all cases, not just Ms Pareena's. We are going to look at 70 other land cases in the same area, including another 600 rai occupied by her father in next 15 days," he said, adding that up to 2,000 rai will be scrutinised.
However, Alro did not say if this 682 rai included the 46 rai owned by the MP that was recently seized by the Royal Forestry Department (RFD).
Mr Vinaroj only said Alro will not interfere with RFD's probe.
MP Pareena has reportedly occupied state land since 2005, and later included it in her asset declaration to the anti-graft agency upon being elected.
This led to an investigation on whether she owned the declared 1,700 rai of land legally.
The RFD on Monday announced that Ms Pareena had violated the law by encroaching on 46 rai of a forest reserve, an offence that could land the rookie politician with a fine of up to 2 million baht and a prison sentence of up to 20 years.
Meanwhile, Capt Thamanat will from next month check whether any more Alro land is being occupied illegally.
Alro has 40 million rai under its jurisdiction, and allocates about 500,000 rai per year to landless farmers, with families getting no more than 50 rai.
Purchasing Alro's allocated land is against the law.