The Supreme Court opposed the court-martial demand.
Bangladesh's Criminal Investigation Department, with the help of Britain's Scotland Yard and the US Federal Bureau of Investigation, has been investigating the mutiny.
Once the department submits its report, the trial is scheduled to start sometime in November, the law minister said, adding the chief of the Bangladesh Rifles would run the trial outside Dhaka in line with the BDR Act by forming courts in those places.
'The trial will be fair and transparent under whichever law it takes place,' he said.
Rights groups have cast doubt on whether the alleged mutineers would get justice if they were prosecuted in an army court martial.