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Priti Patel reportedly ordered officials to explore plans for building an asylum processing centre on a remote volcanic island in the south Atlantic, more than 4,000 miles from the UK.
Home Office officials were instructed to look into the feasibility of transferring asylum seekers arriving in the UK to a centre on Ascension Island, a British overseas territory, according to the Financial Times.
Another option said to have been considered was to construct an asylum centre on St Helena, another island in the group where Napoleon was exiled after his defeat at the Battle of Waterloo.
The Foreign Office was consulted on the proposals, according to the paper, and provided an assessment on the practicalities of shipping migrants to such remote locations.
In the end, it appears that Ms Patel decided not to go ahead with the scheme, however the Home Office made no attempt to deny that the idea had been considered.
Labour condemned the scheme as "inhumane, completely impractical and wildly expensive".
A Home Office official said: "The UK has a long and proud history of offering refuge to those who need protection. Tens of thousands of people have rebuilt their lives in the UK and we will continue to provide safe and legal routes in the future.
"As ministers have said we are developing plans to reform policies and laws around illegal migration and asylum to ensure we are able to provide protection to those who need it, while preventing abuse of the system and the criminality associated with it."
Ascension Island, which is used as a staging post to supply and defend the Falkland Islands, has an RAF base and population of fewer than 1,000.
Moving asylum seekers there and keeping them supplied was said to represent a considerable logistical challenge.
Shadow home secretary Nick Thomas-Symonds said: "This ludicrous idea is inhumane, completely impractical and wildly expensive. So it seems entirely plausible this Tory Government came up with it."
The proposal appears to further reflect the influence of Australia - which has used offshore processing and detention centres for asylum seekers since the 1980s - on the UK's immigration and asylum policy.
The Government has based its post-Brexit points-based immigration system on that developed in Australia.
Ms Patel recently met with former Australian prime minister Tony Abbott, known for his tough stance on immigration, who was appointed by Boris Johnson as a trade adviser to the UK.
Additional reporting by PA