Chuck Hagel said the decision was based on an interpretation of the Pay Our Military Act.
A budget row between Republicans and Democrats has forced the closure of federal services for five days now.
But the sides have now voted to approve back-pay for the 800,000 federal workers sent home without salaries.
In a rare moment of bipartisan co-operation, the House of Representatives on Saturday approved by 407-0 a bill to pay the federal workers once the shutdown ends.
There remains no sign of any deal on the federal budget, however.
Republicans who control the House of Representatives have refused to approve the budget, saying they would only do so if President Barack Obama’s healthcare reform law was delayed or stripped of funding.
Barack Obama and the Democrats have refused, noting the law was passed in 2010, subsequently approved by the Supreme Court, and was a central issue in the 2012 election which Obama won.
The Pay Our Military Act was passed by Congress shortly before the shutdown.
Chuck Hagel said earlier in the week he wanted to find a way to get his civilian staff back to work.
He said lawyers had told him the Pay Our Military Act permitted employees “whose responsibilities contribute to the morale, well-being, capabilities and readiness of service members” to be exempted.
“I expect us to be able to significantly reduce – but not eliminate – civilian furloughs under this process,” Chuck Hagel said.
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