The ministry said migrants will be moved to other migrant reception centres this week.
The announcement comes days after the arrest of the town’s mayor, Domenico “Mimmo” Lucano, who was charged with aiding illegal migration and arranging “marriages of convenience” between local men and foreign women.
Lucano has also been accused of fraudulently allocating rubbish collection services to two companies.
He has been put under house arrest despite protests by locals and supporters of his integration program.
Lucano made headlines around the world for the unusual program which welcomed migrants to the sparsely-populated town of Riace, allowing them to live in abandoned homes and receive on-the-job training.
The aim of the program was to repopulate the town and rejuvenate its economy.
Lucano has been internationally lauded for his innovative program, and was named one of the world’s 50 greatest leaders by Fortune magazine in 2016.
His arrest comes amid a major crackdown on migration by Italy’s populist government.
