John Reid said the medication, part of a program to stop sex offenders re-offending that also includes lie detector tests and satellite tracking, will be tried out in England and Wales.
"This needs to happen in combination with psychological treatment, to help people understand their sexual thoughts, challenge deviant thought processes and reduce the risks and dangers driven by their sexual drives," the home secretary said in a BBC interview.
Reid said the proposal, branded "chemical castration" by the British media, is effective if carried out with the offender's consent.
"It is an eminently sensible thing. It works in areas like Scandinavia. It reduces re-offending. It is not, I repeat not, a substitute for punishment or prison," he said.
Under the new proposals, parents and guardians will be entitled to receive information on convicted pedophiles.
