Fahmy, who has been held in Egypt for 402 days, held dual Canadian-Egyptian citizenship.
Under the rules of a presidential decree, foreign nationals convicted of crimes in Egypt can be deported.
The release of Fahmy is "imminent", Canada's Foreign Minister John Baird said on Monday.
Baird told the Canadian Broadcasting Corporation on Monday that diplomatic efforts to free Fahmy were going very well, but he did not elaborate as to when it was expected to happen.
Fahmy, Al Jazeera's Cairo bureau chief, was arrested in December 2013 along with his colleagues Peter Greste and Baher Mohamed.
They had been accused of colluding with the outlawed Muslim Brotherhood.
After their conviction in June 2014, the men were sentenced to between 7 and 10 years in jail.
On January 1, Egypt's Court of Cassation overturned the journalists' sentences and ordered a retrial, but there is still no indication of when that trial will begin.
Greste was released on Sunday after 400 days in jail.