The move reinforces Mr. Obama's determination, outlined in his Cairo speech earlier this month, to deepen America's role in the Middle East as he seeks to broker peace among Israel and its Arab neighbors and improve U.S. relations in the region.
"The president believes that diplomatic engagement helps serve our interests, and that the current policy didn't make sense," said a senior administration official who spoke on condition of anonymity because the move had not been announced.
Jeffrey D. Feltman, Acting Assistant Secretary of State for Near Eastern Affairs, informed Syrian ambassador to Washington, Imad Moustapha, of the plan on Tuesday night.
Moustapha said that U.S.-Syrian relations "were headed in the right direction" and away from the freeze during the Bush administration.
Nevertheless, Mustapha said, "It is still difficult to talk about radical change in the relationship but we can talk about advancing in small, but consecutive and positive steps."
"This decision reflects the administration's recognition of the important role Syria plays in the region and our hope that the Syrian government will play a constructive role to promote peace and stability in the region," said the administration official. "The reinstatement of an ambassador is a concrete example of the administration's commitment to use all our tools, including dialogue, to address our concerns."
A senior State Department official said that while the decision to return an ambassador to Damascus has been made, the move will not be made immediately. The official also spoke anonymously because the move had not been announced.
Feltman and White House official Daniel Shapiro have both visited Damascus, the Syrian capital, at least twice this year as part of talks about bettering relations with a country shunned by former President George W. Bush.
The move comes as Syria's close ally Iran is in tumult over the June 12 presidential election which kept President Mahmoud Ahmadinejad to power. His challenger, Mir Hossein Mousavi, says the vote was rigged and his supporters have mounted massive demonstrations. At least 17 were killed by security forces.
Syria also remains a key to establishing peace with Israel, which still occupies the strategic Golan Heights, captured from Damascus in the 1967 war.
Syria held indirect talks with Israel last year, mediated by Turkey. But the discussions were halted during the Israeli offensive on Gaza in December and January. Syria has since said it was ready to resume indirect talks with Israel's new hard-line government as long as they focus on a complete Israeli withdrawal from the Golan.
Israeli Foreign Minister Avigdor Lieberman said the move was a matter for the United States and Syria.
"We have never interfered in decisions by the Americans or anyone else. What is important is to see some kind of change in Syrian policy, and unfortunately we have not seen any change," he said. "Syria is not prepared to hold direct talks with Israel without preconditions. What should disturb us is this Syrian policy, which is not encouraging, and I don't see any signs there of a desire to see any progress or any real peace."
The U.S. withdrew its ambassador to Syria in 2005 to protest Syrian actions in neighboring Lebanon. Washington has criticized Syria and Iran for supporting Islamic militant groups such as the Palestinian Hamas in Gaza and Lebanon's Hezbollah. The U.S. also has accused Syria of not doing enough to stop the infiltration of militants to fight U.S. and allied forces in neighboring Iraq.