An intra-group election of 50 senators, representing one-fifth of the total senator seats to be filled, will require a budget of around 1 billion baht, but Deputy Prime Minister Prawit Wongsuwon has vowed to try and lower the cost.
The 50 senators will be drawn from lists of those within the same professional and social groups.
Gen Prawit said the special election must go ahead as stipulated by the charter and that the earmarked budget of over 1 billion baht must be reduced as far as possible.
However, Deputy Prime Minister Wissanu Krea-ngam said the final amount was unlikely to go below 800 million baht.
The other 200 senators will be hand-picked by the National Council for Peace and Order (NCPO). Mr Wissanu said the future costs should be lower.
He said a nine-member panel will be appointed to nominate 400 candidates for the NCPO, which will whittle that list down to 200. They will then join the initial batch of 50 to complete the chamber, officials said.
Gen Prawit insisted the 250 senators are being selected in line with the constitution and a recently approved organic bill on the selection of senators.
He was rejecting criticism the next batch of senators would be chosen to prolong the regime's grip on power.