Dutton told the ABC the Government was in discussions with parties other than Cambodia, which he said remained committed to resettlement despite "undermining" from refugee advocates.
“We're working and have been for a long period of time working on other bilateral options," he said.
“We have Cambodia available as an option and it is difficult when we've got probably well intentioned refugee advocates back here who are messaging up to these people on Nauru, saying 'don't accept any offer'.
“I think the process is being undermined by these well intentioned advocates.”
His comments follow an announcement by the Nauruan government Monday that it will move to process all remaining asylum seekers in the immigration detention centre "within the next week”.
The centre will also become an “open” facility, allowing the approximately 600 asylum seekers to move around the island freely.
The announcement's timing has raised suspicions within the legal community, with the full bench of the High Court scheduled to hear a challenge into the lawfulness of the Government's role in offshore detention on Nauru on Wednesday and Thursday.
Dutton told the ABC the move to open the centre and process remaining asylum seekers was not related to the legal challenge.
“That's an issue for Nauru, because they run the regional processing centre,” he said.
“They make decisions around the open centre arrangements.”
Dutton refused to weigh in on the case further, saying it was an issue “best contested by the lawyers”.
Australia has to be held responsible, Greens say
Greens Senator Sarah Hanson-Young described the timing of the Nauru announcement as “very coincidental”, and welcomed the High Court case.
Speaking to the ABC, Senator Hanson-Young said “Australia has to be held responsible”.
She also urged Prime Minister Malcolm Turnbull and Mr Dutton to allow refugees to resettle in Australia, citing concerns over safety for those who remain in the wake of continued reports of violence against women.
“The justice system and the police system in Nauru is just atrocious,” she said.
“I take extreme offence at the idea that Peter Dutton believes Nauru is a safe place. Let's get on a plane, minister. Let's go to Nauru and I will show you where women stay hidden at night because they are afraid of what will happen to them.”
Dutton responded to the concerns, saying the Government put "a lot of money and financial support" into the arrangements on Nauru.
“Sarah Hanson-Young's stunt of the week is all nice and perhaps a headline, but I want a practical outcome,” he said.
Labor has also raised concerns for the safety and security of remaining asylum seekers on Nauru this week, with Opposition immigration spokesman Richard Marles urging the Government to “ensure the incredibly serious allegations of rape and assault are urgently investigated”.