Dominic Raab made the announcement in the House of Commons on Wednesday after the Parole Board said Tracey Connelly should be released.
She was jailed at the Old Bailey in 2009 for causing or allowing the death of her 17-month-old son Peter at their home in Tottenham, north London, on August 3 2007.
Known publicly as Baby P, he had suffered more than 50 injuries, despite being on the at-risk register and receiving 60 visits from social workers, police officers and health professionals over eight months.
Connelly, now 40, admitted the offence and was handed a sentence of imprisonment for public protection with a minimum term of five years.
Her boyfriend Steven Barker and his brother Jason Owen were convicted of the same offence.
A series of reviews identified missed opportunities for officials to save the toddler’s life had they reacted properly to warning signs.
Describing the case as “harrowing”, Raab told the Commons: “In light of the Parole Board’s direction to release Tracey Connelly, I should inform the House that having carefully read the decision, I have decided to apply to the Parole Board to seek their reconsideration.”
It comes as he told MPs about his plans for parole system reforms.
Earlier, a Parole Board spokesman said: “We can confirm that a panel of the Parole Board has directed the release of Tracey Connelly following an oral hearing.
“Parole Board decisions are solely focused on what risk a prisoner could represent to the public if released and whether that risk is manageable in the community.
“Parole reviews are undertaken thoroughly and with extreme care. Protecting the public is our number one priority.”
Shadow justice secretary, Steve Reed, described Connelly’s potential release as “disturbing news”, adding in the Commons: “I fully support the Secretary of State in seeking a review of that.”
According to a parole report, at the time of her crimes Connelly, then 25, got into relationships quickly, used sex to “help her feel better about herself” and had an “inability to control extreme emotions”. She was also described as “manipulative” and lacking in empathy.
Connelly was let out on licence in 2013 but recalled to prison in 2015 for breaching her parole conditions by “developing intimate personal relationships” online and inciting another resident at her accommodation to engage in “inappropriate sexualised behaviour”.
This was her fourth parole review.
The decision was meant to be made last year but was delayed to obtain more information.
The Parole Board considered Connelly’s case for a third time in 2019 following previous reviews in 2015 and 2017, and refused to either release her or move her to an open prison. In 2020, she lost an appeal against the latest Parole Board decision not to release her.
Since being recalled to prison, Connelly has taken part in a “very intensive” treatment programme from the Ministry of Justice and the NHS over three years and is “now able to work openly and honestly with professionals”, the report added.
The Parole Board said it was satisfied Connelly is suitable for release after hearing she is now considered to be at “low risk of committing a further offence” and that her probation officers and prison officials support the plan.
Justice Secretary Dominic Raab was represented throughout the review and his representative “confirmed that this recommendation was accepted”, the report said.
Connelly will be subject to restrictions on her movements, activities and who she contacts, and faces 20 extra licence conditions.
They include living at a specified address, being supervised by probation, wearing an electronic tag, adhering to a curfew and having to disclose her relationships.
Her use of the internet and a phone will be monitored and she has been told she cannot go to certain places to “avoid contact with victims and to protect children”.