Socialist Prime Minister Pedro Sanchez, who came to power in June, had vowed to remove Franco's remains from an imposing basilica in the Valle de los Caidos (Valley of the Fallen) near Madrid, which was built in part by political prisoners during his regime.
A man wearing a Franco-era Spanish flag among visitors at the Valley of the Fallen. Photo: AFP
Spain's cabinet meets on Friday and will give its final green light to the exhumation of Franco, said a government source, who refused to be named.
The family will be able to appeal this at the Supreme Court, which would delay the exhumation.
The source said the government would also give the family two weeks “to decide on a place for the (re) burial and, if they don't do it, the government will decide.”
The bid to exhume the remains of Franco, who ruled from 1939 to 1975, has run into difficulties.
Franco's family wants to bury his remains in a crypt at Madrid's central Almudena Cathedral, where the family owns a crypt and where the dictator's daughter, Carmen Franco-Polo and her husband are already interred.
The government wants Franco's embalmed body to be relocated to a more discreet spot and has already told them this will not be possible.
Fresh flowers on Franco's grave in the Valley of the Fallen. Photo: AFP
In a report prepared last November, the government said it fears such a central site as the Almudena, would only attract an even larger number of visitors. This would pose a significant headache for security forces as it is right next door the Royal Palace.
The government would prefer that the late dictator is buried somewhere more low-key. It has been suggested that a grave in the Mingorubbio cemetery in El Pardo, a town on the edge of Madrid where the Franco family had a palace, would be ideal.
His wife, Carmen Polo was buried there on her death in 1988.
The Mingorubbia cemetery has been suggested for reburial.
But there are fears that any new burial site will become a place of pilgrimage for admirers of Franco and supporters of fascism.
Last year alone, 366,000 people visited the Valley of the Fallen, according to ticket sales at the site – 150,000 of them in the July and August after the newly installed Spanish government announced plans to exhume him.
Paul Preston, historian and author of numerous books on the Spanish Civil War and Francoist regime, suggested a bold solution to BBC Radio 4's Today programme: “He never missed an opportunity to dress up as Admiral of the Fleet so why not bury him at sea.”