A statement from the Saudi Embassy in London says the country's Olympic Committee will "oversee participation of women athletes who can qualify".
The decision will end recent speculation as to whether the entire Saudi team could have been disqualified on grounds of gender discrimination.
The public participation of women in sport is still fiercely opposed by many Saudi religious conservatives.
There is almost no public tradition of women participating in sport in the country.
Saudi officials say that with the Games now just a few weeks away, the only female competitor at Olympic standard is showjumper Dalma Rushdi Malhas.
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