The decision includes Dadaab, the largest such camp in the world
. It's home to more than 300,000 people on the Kenya-Somalia border.
The government is shutting down the camps because of "very heavy" economic, security and environmental burdens, senior Interior Ministry official Karanja Kibicho said in a statement.
"Kenya, having taken into consideration its national security interests, has decided that hosting of refugees has come to an end," Kibicho said, pointing to threats, such as the terror group Al-Shabaab.
Kenya announced the closure of refugee camps last year
for the same reasons but backed down in the face of international pressure. Most of the camp residents come from Somalia, which has been torn by civil war.
At the time, government officials were not clear where they expected the refugees to go, other than somewhere into Somalia and out of Kenya. Kibicho's statement didn't address the question of where the refugees would go.
While it is not immediately clear if or when a closure might happen, the Interior Ministry said it has already disbanded the Department of Refugee Affairs as a first step.
A 20-year-old Somali said living in Dadaab is hard, but leaving will also be difficult
"Dadaab is like being in a cage and now when they ask us to go home ... first of all, which home is that?" he said.
"My parents have been in Kenya for 25 years, I was born in this camp and now I want to join university, which I can't because they have given me an alien card but then they actually closed down the department of refugees.
"My card might not be valid in Nairobi anymore. My movement will be restricted. I don't know what to do but I will see how to go about it."
He said his parents lost all their land and property during the war. Sending people back with $100 or $1,000 as an incentive to start life over again won't work.
"I agree no one has to live in a refugee camp all their life," he said. "It's not correct morally, but then if you've left your home 25 years ago, going back is like going back to a new place."
The government called on the international community to "collectively take responsibility" for the humanitarian needs of the hundreds of thousands who may be affected by this.
Amnesty International blasted what it called a "reckless decision" by Kenya.
Kenya's decision is "an abdication of its duty to protect the vulnerable and will put thousands of lives at risk," said Muthoni Wanyeki, Amnesty's regional director for East Africa, the Horn and the Great Lakes.
He said Kenya would be violating its obligations under international law.