The decision precedes a major national security speech by President Barack Obama Thursday.
Attorney General Eric Holder announced early Thursday that Ahmed Ghailani will be sent to New York City for trial, which would make him the first Guantanamo detainee brought to the U.S. and the first to face trial in a civilian criminal court.
Ghailani was indicted by a federal grand jury in New York for the 1998 bombings of U.S. embassies in Africa - attacks that killed 224 people, including 12 Americans. It was not immediately clear when the transfer would occur.
"By prosecuting Ahmed Ghailani in federal court, we will ensure that he finally answers for his alleged role in the bombing of our embassies in Tanzania and Kenya," Holder said in a statement.
"This administration is committed to keeping the American people safe and upholding the rule of law, and by closing Guantanamo and bringing terrorists housed there to justice we will make our nation stronger and safer," the attorney general said.
Ghailani, a Tanzanian, was categorized as a high-value detainee by U.S. authorities after he was captured in Pakistan in 2004 and transferred to the detention center at the U.S. naval base in Cuba two years later.
The decision on the first U.S. trial of a Guantanamo detainee comes as President Obama faces pressure from across the political spectrum on his plan to close the detention center by January 2010. Democrats have said they want to see the president's plan for closing the base before it approves money to finance it, and Republicans are fighting to keep Guantanamo open.
In a rare, bipartisan defeat for President Obama, the Senateto keep Guantanamo open for the foreseeable future and forbid the transfer of any detainees to facilities in the United States.
Some lawmakers have already voiced opposition to bringing Guantanamo detainees to the U.S. for trial, even in heavily guarded settings.
Congressional opposition aside, national security experts say Mr. Obama has little choice but to close the prison. It "would be destructive to his credibility" if Guantanamo does not close, says CBS News national security consultant Juan Zarate.
Mr. Obama met with representatives of the ACLU, Human Rights Watch, and other human rights groups at the White House Wednesday.
The Associated Press reported in March that Ghailani was among a handful of high-value suspects that prosecutors were considering bringing to trial in the United States on charges that predate the Sept. 11, 2001, terror attacks.
Trying Ghailani for the embassy attacks may help prosecutors avoid legal challenges surrounding Ghailani's detention and treatment.
U.S. authorities say he helped plan and deliver the explosives in the embassy attack, and later rose up through the al Qaeda ranks.
He has denied knowing the TNT and oxygen tanks would be used to make a bomb. He also denied buying a vehicle used in the attack, saying he could not drive.
Just before the embassy bombings, Ghailani flew to Pakistan.
Last year, military prosecutors charged that after the 1998 bombings, Ghailani worked for al Qaeda as a document forger, trainer at a terror camp and bodyguard to Osama bin Laden.
The Ghailani decision revives a long-dormant case charging bin Laden and top al Qaeda leadership with plotting the Aug. 7, 1998 bombings at U.S. embassies in Nairobi, Kenya and Dar es Salaam, Tanzania.
The blasts killed more than 200 people and injured thousands, including many who were blinded by shards of flying glass. The attacks prompted then-President Bill Clinton to launch cruise missile attacks two weeks later on bin Laden's Afghan camps.
Four other men have been tried and convicted in the New York courthouse for their roles in the embassy attacks. All were sentenced to life in prison.