The former president’s nephew, Leo Mugabe, said the decision over the final resting site had been made after relatives held discussions with influential traditional chiefs.
It will be a private family burial but a date has not yet been chosen.
Mr Mugabe died aged 95 in Singapore last week.
The national Heroes’ Acre monument in the capital Harare which has been chosen for the burial is reserved for top officials of Zimbabwe’s ruling ZANU-PF party who helped to end white colonial rule.
A gravesite next to where Mr Mugabe’s first wife, Sally, is buried has long been reserved for the former leader.
Mr Mugabe oversaw the construction of the monument, which sits at the top of a large hill and features a towering sculpture of guerrilla fighters designed by North Korean architects.
But some family members wanted the former leader to be buried in his birth village of Kutama, 55 miles (85 km) from Harare, in line with Zimbabwean tradition.
It was a tussle which highlighted friction between current president Emmerson Mnangagwa and Mr Mugabe’s relatives.
Mr Mnangagwa, who was a once-trusted deputy of Mr Mugabe but helped to oust him from power in 2017, met the family and said he would consult with the ex-president’s widow, Grace, over the dispute.
He said on Thursday he would respect the family’s wishes and they have “the full support of the government”.
Mr Mugabe’s body is currently on view at a stadium in Harare for supporters to pay their respects.
Several people were injured in a stampede while trying to view the body on Thursday.
There will be a state ceremony on Sunday which several African heads of state and other dignitaries are expected to attend.
The actual burial will occur several days later, said his nephew.
Mr Mugabe fought to end white minority rule and led Zimbabwe for 37 years, although there were mixed feelings on news of his death.
Despite earning respect for liberating his country, he was also accused of human rights abuses and being responsible for the deaths of thousands of his political opponents.