Bangladesh plans to relocate thousands of Rohingya who have spent years in refugee camps near the Myanmar border to a southern island, an official said Wednesday.

A Rohingya boy outside Kutupalong refugee camp near Cox's Bazar.

The government has started planning the relocation to Hatiya island in the Bay of Bengal, a move backed by Bangladesh Prime Minister Sheikh Hasina, the head of the government's Myanmar Refugee Cell Amit Kumar Baul said.

"The relocation of the Rohingya camps will definitely take place. So far informal steps have been taken according to the PM's directives," Baul told AFP.

Bangladesh is home to 32,000 registered Rohingya refugees who are sheltering in two camps in the southeastern district of Cox's Bazar which borders Myanmar.

A Rohingya leader said the move would only make life worse for the refugees, many of whom have been languishing in the camps for years.

"We want the (Bangladesh) government and international organisations to resolve our issue from here," Mohammad Islam, a community leader in one of the camps, told AFP.

Baul said the move was partly prompted by concerns the camps were holding back tourism in Cox's Bazar, where locals flock to beach hotels and resorts.

Thousands of persecuted Rohingya and Bangladeshi migrants have been attempting perilous journeys by boat to Southeast Asia.

Thailand began a crackdown on human trafficking and smuggling following the discovery of mass graves, which appears to have thrown regional trafficking routes into chaos.

News of the plan comes just days after Hasina slammed Bangladesh's own economic migrants, many of whom are stranded in dire conditions at sea, calling them "mentally sick" and accusing them of hurting the country's image.

READ: Bangladesh prime minister says 'mentally sick' migrants should be punished