Interior Minister Wolfgang Peschorn said it would be an "unmistakable signal" that the property did not commemorate Nazism.
Hitler spent the first few weeks of his life in a flat in the 17th-Century building in the town of Braunau am Inn.
The fate of the property has been the subject of a lengthy dispute.
For decades, the government rented it from its former owner in an attempt to stop far-right tourism.
It was once a day-care centre for disabled people, but this ended when owner Gerlinde Pommer objected to plans to make it more wheelchair-friendly and then refused all government offers to buy it or carry out renovations.
A plan to turn it into a centre for refugees in 2014 also came to nothing.
The government took possession of the house in 2016 under a compulsory purchase order, for a price of 810,000 euros ($897,000; £694,000).
There has been widespread debate and disagreement in Austria over the fate of the building.
Some have called for it to be torn down, while others argued it should be used for charity work or as a house of reconciliation.
In his statement on Tuesday, Mr Peschorn said the house's "future use by the police should send an unmistakable signal that this building will never again evoke the memory of National Socialism".
Hitler was born in Braunau am Inn, where his father had been posted for work, on 20 April 1889. The family stayed in an apartment in the building for a few weeks after his birth before moving to another address in the area.
They left the town for good when Hitler was three years old.
He returned briefly in 1938, on his way to Vienna, after he annexed Austria to Nazi Germany.
Under Hitler's rule (1933-45), Nazi Germany began World War Two, pursuing a genocidal policy that resulted in the deaths of some six million Jews, and tens of millions of other civilians and combatants. BBC