Authorities in Peru have accepted a request for the transfer of Michaella McCollum to a prison in Northern Ireland.
McCollum, from Co Tyrone, was detained with Scottish woman Melissa Reid at Lima Airport in August last year after 11.5kg of cocaine was found in their luggage.
In December, McCollum pleaded guilty to drug smuggling and was sentenced to six years and eight months in prison.
McCollum's solicitor, Belfast-based Kevin Winters, has confirmed the Peruvian authorities have accepted a formal request to transfer the 20-year-old to Northern Ireland.
It is understood the process could take a number of months as the logistics of the transfer will be complicated.
Prisoners must be accompanied throughout their journey.
Airlines and airports must be advised, with security arrangements put in place at departure, transit and final stops.
The Government has been providing consular support to McCollum, as she is an Irish citizen.
A statement from Kevin Winters Law Firm said: "Last week we received confirmation from the Irish Department of Foreign Affairs that the Peruvian Authorities had accepted Michaella's prison transfer request and in turn passed this to the UK National Offenders' Management Service (NOMS).
"It is our understanding that NOMS are due to liaise with the various prison authorities in order to facilitate the next stage of the transfer process."
The statement added that the firm understood "the relevant authorities in Peru and the UK have put a system in place in order to make sure that a transfer takes place as efficiently as possible".
A Northern Ireland Prison Service spokesman said: "We don't normally comment on individual cases.
"All transfer requests are however dealt with as expeditiously as possible."
Reid has also requested a transfer to Scotland, but this is being dealt with by different lawyers.
Her father has met Scotland's justice secretary Kenny MacAskill and is hopeful that his daughter will serve the rest of her sentence closer to home.
The pair faced the prospect of a maximum 15-year prison term, but struck a plea bargain to secure a shorter sentence.
They had previously been held at Lima's Virgen de Fatima prison, but McCollum was moved to the notorious Ancon 2 prison, where conditions reportedly mean she is crammed into a cell with 30 other prisoners.
The situation at the mixed prison, which is two-and-a-half hours from Lima, has previously been criticised by McCollum's lawyer as "appalling".
Mr Winters said sanitation and toilet facilities are extremely poor and all females have to use a hole in the ground, which has to be covered up because of the presence of vermin.