Saudi Arabia will allow women to compete under its flag in the Olympic Games for the first time this summer.
The decision follows speculation over whether the country's team would be disqualified for gender discrimination after it appeared to block female athletes from taking part.
But the Saudi embassy told the BBC its Olympic Committee would now "oversee participation of women athletes who can qualify".
The decision, supported by Saudi ruler King Abdullah, was taken earlier this month but an announcement was reportedly delayed due to the death of Crown Prince Nayef, the heir to the throne.
Women's participation in sport has long been met with opposition in the desert kingdom.
"It's very sensitive," a senior Saudi official told the broadcaster.
"King Abdullah is trying to initiate reform in a subtle way, by finding the right balance between going too fast or too slow.
"For example, he allowed the participation of women in the Shura council (an advisory body) so the Olympic decision is part of an ongoing process, it's not isolated."
The only female Saudi competitor at Olympic standard is said to be showjumper Dalma Rushdi Malhas.
But others could compete. If selected, their outfits would most likely comprise loose-fitting garments and a "sports hijab", a scarf covering the hair but not the face.
The announcement comes after Olympics minister Hugh Robertson said he had no power to intervene if Saudi Arabia blocked female athletes from competing in London.
In April he said the International Olympic Committee (IOC) was "working on the issue" to "try to find a way so that some Saudi women are able to compete".
"You are always balancing the conservative elements in Saudi Arabia against those who want to reach out," he said.
"But of course I would very much like to see Saudi women competing in London."