"We say that expropriation is provided for in the constitution but the constitution also provides that there must be compensation, fair compensation," he said in reply to a question in parliament.
He did not give details of how the compensation would be decided.
Land is an emotive issue in post-apartheid South Africa where whites still control most of agriculture and frustration is growing about the slow pace of reform, prompting a review of the government's "willing buyer-willing seller" approach.
Last month, the government issued notice of its first farm expropriation, using its powers to return land to its original black owners after negotiations with the farmer broke down over price.
"We have to look at the totality of issues that has served as blockages in terms of faster movement forward and remove those blockages and the expropriation issue is related to this," Mbeki said.
He added this was not peculiar to South Africa, as it was also allowed by the U.S. constitution in some circumstances.
But he stressed that South Africa would learn from the experiences in neighbouring Zimbabwe.
The government has been careful to distance itself from the approach taken in Zimbabwe, where violent land seizures have often been blamed for an economic collapse and a deepening political crisis.