Flanked by Turkana governor Jeremiah Lomorukai, the PS said more than 900,000 refugees will benefit from the plan dubbed Shirika.
Lomorukai said the budget will be used to transition the camps into municipalities and the inclusion of refugees into Kenya's national system.
The plan will also support economic development in Turkana and Garissa.
Bitok said the plan is a pioneering example of a new approach to refugee management that seeks to transform refugees' lives and ease pressure on the host community.
"Shirika plan aims to ensure refugees get to enjoy all the services and all opportunities, whether it is education or housing, infrastructure and scholarships to ensure they live in harmony," he said.
The PS said talks are underway to ensure security is beefed up during and after the transition.
Over the years, residents and aid officials from Dadaab camps have expressed concerns for their safety as bandits kill, rape and steal while Islamic militants target civilians and security forces with bombs and shootings.
After the validation of the Shirika Plan by the national steering committee, there shall be stakeholder engagement. It shall then be taken to the Cabinet by August ahead of launch scheduled for November.
Meanwhile, Africa International University Deputy Vice-Chancellor Joseph Kiplangat is urging the government and stakeholders to join hands in serving the needs of refugees and immigrants.
Speaking yesterday when the university marked its 40th anniversary, Prof Kiplangat said Kenya's refugee integration efforts have gained significant momentum. The university offers refugees fleeing conflict a path to higher education and rebuilding their lives in Nairobi.
"We urge collaboration with institutions like ours, as we have faced challenges with undocumented refugees. However, we are working closely with the ministries of Migration, Citizen Services, and Foreign Affairs to assist in settling these displaced individuals," Kiplangat said.