The US is poised to pay a $6bn (£4.8bn) ransom to Iran which could see the release of a British national and four Americans.
The Biden administration has agreed to issue a waiver for international banks to issue frozen Iranian money without incurring sanctions in exchange for the five prisoners.
Among them is expected to be Morad Tahbaz, a British-American conservationist of Iranian descent, alongside detained Americans Siamak Namazi and Emad Sharghi.
They had all been held on widely-criticised spying charges at Tehran’s infamous Evin prison, which once held Nazanin Zaghari-Ratcliffe, who was released last year.
Four of those five were released from prison and placed under house arrest last month, according to US officials.
Under the deal, five unnamed Iranian citizens held in the US will also be released.
The deal was signed off by US secretary of state Antony Blinken last week, but Congress was only informed on Monday.
It has drawn some criticism of President Joe Biden by Iran hawks in the Republican Party, who say the deal will boost the Iranian economy at a time when Iran poses a growing threat to US troops.
Republican Senator Ted Cruz said the waivers were a sign the Biden administration was secretly pursuing a broader deal with Iran to include more than the release of the detainees.
“Today’s news confirms there has already been a side deal including a $6 billion ransom and the release of Iranian operatives," Mr Cruz said in a statement.
But the White House pushed back on all criticism of the waiver decision, saying it was only a “procedural step" aimed at fulfilling the tentative agreement reached with Iran in August.
“What is being pursued here is an arrangement wherein we secure the release of 5 wrongfully held Americans," said Adrienne Watson, a spokeswoman for the National Security Council.
“This remains a sensitive and ongoing process. While this is a step in the process, no individuals have been or will be released into US custody this week."
The waiver means that European, Middle Eastern and Asian banks will not run afoul of US sanctions in converting the money frozen in South Korea and transferring it to Qatar’s central bank, where it will be held for Iran to use for the purchase of humanitarian goods.
It applies to transactions involving previously penalised entities such as the National Iranian Oil Company and Central Bank of Iran, said Mr Blinken in a written filing.
A Foreign, Commonwealth and Development Office said: “We are pleased to see British national Morad Tahbaz has been released on furlough. This is a first step, and we remain focussed on his permanent release.”
