Senior officials in the White House have said that the State Department is going to remove the Iranian dissident organisation, Mujahadin-e-Khalq (MeK) from the US list of terrorist organisations.
The officials said the decision would be announced formally next week.
The group has renounced violence, while still calling for regime change, and is thought to have provided the US with intelligence on Iran's nuclear programme.
US Iranians spent millions of dollars to enlist a wide range of US politicians to support the deproscription of the organisation, but only three years ago the US arrested several pro-MeK activists for raising funds for a banned terrorist organisation.
Now members of congress 'openly praise' the organisation.
The MeK used to fight against the rule of the US-backed Shah of Iran in the 1970's, carrying out a bombing campaign, including on US targets which killed several Americans.
Later they fought against the clerical rulers of Iran, aligning themselves with Saddam Hussain during the Iran-Iraq war and even took part in attacks on Iraqi Kurds, crushing their rebellion against Hussain.
MeK have claimed in the past to have killed thousands of Iranians who they described as agents of the regime.
The US banned the group in 1997 and after the invasion of Iraq in 2003, the MeK surrendered its weapons to US troops.
The MeK had sheltered in Camp Ashraf near the Iranian border but tensions with the Iraqi government resulted in several clashes since 2009, killing at least 45 of their members.
The organisation has now agreed to leave Camp Ashraf after mediation by the US.
The deproscription makes it easier for members of the group to be resettled abroad.
