The Agricultural Land Reform Office (Alro) says it will "repossess" Sor Por Kor land illegally occupied by resorts and hotels, and then rent the land back to them.
However, the process involves amending the land's allocation status.
"What we are going to do is take land back from resorts and hotels so the illegally occupied land is back under Alro control. Later, we will let them rent the land under our new regulations, which should take around three months," said deputy agriculture minister Thamanat Prompow, who oversees Alro.
Sor Por Kor land is forest land which the state allocated to poor farmers for cultivating.
Farmers are supposed to use the land for cultivation only, and not sell it or use it for other purposes.
However, this policy has been abused with many Sor Por Kor plots having been illegally acquired by investors for business purposes or used for other activities by farmers.
This includes building resorts and hotels on the land.
"Not all Sor Por Kor land is now fit for farming and it is better if Alro can utilise it differently," Mr Thamanat said.
The regulations would be adjusted for better land management, including relaxing some regulations so hotel entrepreneurs can invest in Sor Por Kor land for tourism activities.
The ministry will consider an appropriate rental rate based on Treasury Department recommendations and a committee will draft the new regulations.
Alro, he said, will survey hotels on Sor Por Kor land, starting with around 300 resorts in Phuket and 100 hotels on Ko Samui.