Assange is wanted for arrest in Sweden for alleged sex offences, but is avoiding extradition from London by sheltering in the Ecuadorian mission there.
He fears he would be sent onwards from Sweden to the USA, where he could face legal action over the release of a large number of American diplomatic cables. Swedish legal experts say such an extradition would be highly unlikely.
Foreign Minister Ricardo Patino told journalists in Quito moving Assange to the Ecuadorian embassy in Sweden meant he would "remain under our protection while also satisfying the demands of the Swedish justice system."
He added, however, he would rather that Swedish prosecutors came to London and interviewed Asssange there.
Swedish prosecutors have previously turned down offers to go to London, saying that they need to question Assange in Sweden as he could be indicted straight afterwards, something which can only be done on Swedish soil as a court case would begin withing two weeks of the indictment.
The lawyer representing the two women in the case called the suggestion "absurd".
Claes Borgström told news agency TT: "That he should be able to be in an embassy is an absurd thought. It's astounding. There is no reason to treat Assange any differently than anyone else in that situation. There should be equality before the law".