The members of the Mujahedin-e Khalq Organization (MKO, aka People's Mujahedin Organization of Iran), which calls for the overthrow of Iran's clerical rulers, are to stay at the transit camp while awaiting arrangements to settle outside Iraq.
The MKO calls the move of the 400 residents a show of good faith that could lead to the relocation of the rest of Camp Ashraf's some 3,000 resident to the transit site in the future.
The arrangements follow a deal between the Iraqi government and the United Nations in December to move the MKO out of Iraq.
"Iraq inherited a problematic legacy from the former regime and these problems damage Iraq's relations with its neighbors and also infringe on Iraq's sovereignty," Iraq's national security adviser, Falih al-Fayadh, said in Baghdad.
"The presence of this unwelcome organization is unacceptable and we refuse for Iraq's sovereignty to be infringed in this way. The Iraq government decided last year to put an end to their presence and close the camp."
The MKO, which fought alongside Iraqi forces in the 1980-88 Iran-Iraq War, has since twice clashed with Iraqi security forces, in 2009 and 2011, as Baghdad's relations with Iran have improved.
Camp Ashraf has been home to MKO members since the 1980s.
The group is designated a terrorist organization by both Iran and the United States.
Compiled from agency reports