Responding to years of pressure from the families of those killed in the attacks, the Justice Department and its law-enforcement arm, the FBI, decided to declassify the name of the Saudi official "in light of the extraordinary circumstances of this particular case."
The Justice Department did not say when they would make the name public.
Al Jazeera's Gabriel Elizondo, reporting from Washington, DC said the name would be revealed first to the court and the families of the victims.
"Then it is expected that the lawyers will appeal to the Justice Department to have the name released publicly," he said.
The case has long threatened to embarrass the Saudi government, which has repeatedly denied links to al-Qaeda, and would leave it exposed to claims of damages that could reach billions of dollars.
The person is the last of three main officials in Saudi Arabia referred to in an FBI report into the attacks and allegedly assisted some of the attackers after they arrived in the US.
In all 19 men, 15 of them Saudis, took part in the plot to hijack four commercial aircraft and crash them into New York's World Trade Center, the Pentagon and possibly the White House or Congress.
Nearly 3,000 people were killed in New York, Washington and Pennsylvania, and families have sued seeking damages from the Saudi government.
An official report into the attacks in 2002 said that some of the attackers had received funds from Saudi officials, "at least two" of whom were "alleged by some to be Saudi intelligence officers."
The two were Fahad al-Thumairy and Omar al-Bayoumi, who were attached to Saudi Arabia's US embassy at the time.
Wednesday marked the 18th anniversary of the 2001 attacks that killed nearly 3,000 people in the US [Brendan Mcdermid/Reuters]
Subsequent investigations rejected the claim that they were involved with the hijackers.
But in 2012, a redacted FBI report repeated the allegations and referred to a third person who may have directed them, but blacked out his name.
'Sad and shameful'
Rumours have tied the individual to the Saudi royal family. But his identity has remained classified as Washington and Riyadh worked closely after the attacks to root out al-Qaeda's network across the Middle East and South Asia.
"The FBI recognises the need and desire of victims' families to understand what happened to their loved ones and to hold those responsible accountable," the Justice Department said.
But it suggested the individual might not have been involved with the al-Qaeda plotters.
"The information referring to that individual refers to an investigative theory being pursued by the FBI at that time, and does not represent an objective statement of fact," it said.
Those involved in the lawsuit welcomed the decision.
"The families are dedicated to getting to the truth, and we shouldn't have to beg for this sort of basic information, or be kept in the dark, about the Saudi role in the attacks," said Terry Strada, the national chairman of the group which sued the 9/11 Families & Survivors United for Justice Against Terrorism.
Al Jazeera's Elizondo reported that the lawyers of the victims expect more revelations and disclosures in the coming weeks.
"They said that this battle is not over yet. They want to identify any and all Saudi officials that were involved in the attack."
Coleen Rowley, a former FBI Special Agent who exposed the bureau's failure to heed the evidence of a plot before the 9/11 attacks, remains critical of the government.
She said that the information should have been made available to the families years ago.
"They were thwarted every step of way, in fact even by some judges, who would not let them even proceed with their suit," she said.
"It is sad and shameful that it has taken 18 years for even this little bit of truth to come out."