Melbourne newspaper the Herald Sun reported a small group of workers exhumed the remains with former prison chaplain Father Peter Norden watching from the side.
It said the workers commenced digging at the eastern end of the former D Division building and found Ryan's coffin in "reasonable condition".
Daughter Wendy Ryan declined to comment saying it was "a very private thing".
The Herald Sun reported in October that Ryan's three daughters planned to bury their father with his wife Dorothy Pirois at a cemetery in Portland.
The report said the family would pay for the State Coroner's office to conduct DNA tests to confirm the remains are those of their father.
The last man
Ryan was hanged on 3 February, 1967 for the murder of prisoner officer George Hodson, who was shot during an escape from Pentridge the previous year.
He was buried the day of his execution in an unmarked grave in the prison grounds.
The site of the former prison is now being redeveloped for commercial and residential use.
Ryan hanging: Two groups of victims -- 2 March, 2007
'Ryan was innocent': lawyer - 13 February, 2007
Ronald Ryan forty years on -- 5 February, 2007
Picture: Ryan captured after 17 days on the run