Mr Dutton's comments come in the wake of Prime Minister Turnbull confirming that the centre will close before the end of the year.
Speaking to Sky News, Mr Dutton said the government had been clear about the future of legitimate refugees from the start.
'Given that PNG is a signitory to the convention and to the protocols, they have responsibility to settle those people,' Mr Dutton said.
'We've have been very clear, those people are not going to settle in our country because that is going to restart the people trade and we are not going to allow women and children to drown at sea again,' '...we're just not going to allow the people smugglers to be out there again - saying "look if you wait you'll eventually get to Australia".'
'There are facilities available and there will be resources available to provide people with settlement options.'
Mr Dutton said the US is continuing to examine each case.
'We have said we want to close the Manus detention centre by October 31 and we'll work with PNG, obviously the officials from the US - both the Homeland Security and state departments - are looking at each individual case at the moment and we hope that many of those people can be resettled in the US.'
PM Turnbull avoided questions on the fate of the refugees while at a press conference with Papua New Guinea's Prime Minister Peter O'Neill in Port Moresby on Saturday.
'We will take this process one step at a time,' Mr Turnbull said.
The immigration department last month confirmed that Australia is not in negotiations with any other third countries.
Only an estimated 15 refugees have been resettled in PNG so far.
While a small handful has been able to obtain professional jobs, many have struggled to rebuild their lives because of tribal violence and extreme poverty.
'Many of the refugees are not willing to resettle in PNG. We cannot force people into a resettlement exercise if they are not willing to accept our offer,' Mr O'Neill said.
Last April, the PNG Supreme Court found the detention centre breaches the country's constitution.
There were 861 men living at the centre as of late January, according to the most recent statistics from Australia's immigration department.