The Bureau of Prisons is transferring Combs, 56, from FCI Fort Dix to FCI Allenwood Low, a low-security facility south of Williamsport and about 250km west of New York, the person said.
The Bureau of Prisons confirmed the move but provided no further details.
The agency said it does not discuss conditions of confinement for anyone in its custody, including reasons for transfer, for privacy, safety, and security reasons.
"Decisions about inmate placement are made by the BOP, and we are not in a position to speak to the circumstances surrounding this transfer," said Combs' spokesperson, Juda Engelmayer.
"Sean remains focused on moving forward, and we hope that his time at the new facility will be productive and without unnecessary disruption."
Combs is serving a four-year, two-month sentence for his conviction last year on prostitution-related charges for transporting people across state lines for sexual encounters.
The case featured harrowing testimony about violence and sex parties he called "freak-offs." It was a forceful reckoning for one of music and entertainment's most influential figures.
Last month, NBC News reported Combs was continuing to enjoy aspects of his millionaire lifestyle at FCI Fort Dix, smuggling in Hennessy, having fellow inmates cook, clean, make his bed and give him massages, and using a contraband mobile phone to view social media and an ex-girlfriend's nude selfies.
On Wednesday, TMZ reported Combs was injured in a fight with another inmate at Fort Dix and had to be taken out of the prison for treatment.
In a rare rebuttal, the Bureau of Prisons refuted TMZ's report, telling the AP: "The story you are referring to is false and did not happen."
In the wake of the NBC report, Combs was placed in the prison's special housing unit, a heavily secured part of the facility away from the general population, for inmates with disciplinary issues or security concerns. He has also been docked 41 days of good-conduct credit, pushing his release date back to March 2, 2028, according to the person familiar with the matter.
In April, the 2nd US Circuit Court of Appeals heard arguments in Combs' bid to overturn his conviction and sentence, which his lawyers argued was too harsh. The court has yet to rule.
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