"It's going to take 12bn Kenya shillings ($155,000) to treat Aids patients alone, whereas the budget of the Ministry of Health is only 9bn ($116,000). Therefore we must look for cheaper alternatives," he said.
Kenya says it plans start importing cheap generic Aids drugs as soon as possible.
Kenyan Health Minister Sam Ongeri said the appropriate legislation would be put to parliament within the next few weeks.
More than 500 Kenyans die of Aids-related illnesses every day, and in some towns one in three people are HIV positive.
The move is likely to infuriate international pharmaceutical companies already fighting a legal battle to stop the South African authorities from doing the same.
Unaffordable
Mr Ongeri said his country simply couldn't afford to buy Aids drugs at the prices being set by international pharmaceutical companies.
"It's going to take 12bn Kenya shillings ($155,000) to treat Aids patients alone, whereas the budget of the Ministry of Health is only 9bn ($116,000). Therefore we must look for cheaper alternatives," he said.
Mr Ongeri said the plan was to rush new legislation through parliament enabling Kenya to ignore international patents and import cheap generic drugs made in countries like India.
World trade rules do allow for such radical steps in cases of national emergency.
New trial
But the announcement is unlikely to please the world's biggest pharmaceutical companies. They are keen to protect their patents and have already offered to reduce the cost of their Aids drugs in Africa.
The Kenyan announcement was made at the launch of a new Aids vaccine trial in Nairobi. A young doctor became the first Kenyan volunteer to be injected.
The trial, a joint venture with British scientists, is testing the first vaccine designed specifically for Africa.
It is based on research in a Nairobi slum where a number of prostitutes were found to be immune to the virus despite massive exposure.