Saudi Arabia will allow women to drive, according to the Saudi Press Agency.
The longstanding policy had been widely criticized worldwide. In recent years it became seen as a human rights violation, as women began to get behind the wheel as a form of protest.
Saudi Arabia was the only country in the world where a woman could go to jail for driving, before the new policy.
As one activist recounted to The New York Times earlier this year, recent protests to give women the right to drive were largely unaware of a history of women drivers going back to 1990 – as those first activists became social outcasts.
The new driving policy may be linked to the rise of Saudi Crown Prince Mohammad bin Salman, a 32-year-old who is rapidly gaining power and influence in the kingdom.
The New York Times' Ben Hubbard highlighted the various ways Saudi Arabia has tried to justify the ban:
"Some said that it was inappropriate in Saudi culture for women to drive, or that male drivers would not know how to handle women in cars next to them. Others argued that allowing women to drive would lead to promiscuity and the collapse of the Saudi family. One cleric claimed - with no evidence - that driving harmed women's ovaries."
The new rule will not take effect immediately.
Women in Saudi Arabia still face many restrictions under the extreme form of Islam that governs the kingdom. There are laws that prevent women from showing too much skin while in public, for instance, and a guardian system requires a man to give women permission for everyday tasks.