"We've had a breakthrough in the Gulf Cooperation Council rift," said the official, who spoke to Reuters on condition of anonymity.
The development is the latest in a series of Middle East deals sought by Washington - the others involving Israel and Arab states - aimed at building a united front against Iran. All of the countries involved in the deals are US allies.
White House senior adviser Jared Kushner, assigned to work on the dispute by US President Donald Trump, helped negotiate the deal and was working the phones on it until the wee hours of Monday morning, the official said. When in December, Saudi Arabia's foreign minister said a resolution to the dispute seemed within reach, Iran’s Foreign Minister Mohammad Javad Zarif in a Twitter post said he hoped Gulf reconciliation “contributes to stability and political and economic development for all peoples of our region.”
Saudi Arabia, the United Arab Emirates, Bahrain and Egypt have imposed a diplomatic, trade and travel embargo on Qatar since mid-2017 accusing it of supporting terrorism. Qatar denies it and says the embargo aims to undermine its sovereignty.
Kushner, joined by Middle East envoy Avi Berkowitz and Brian Hook, a special State Department adviser, were flying to the Saudi Arabian city of al-Ula to attend the ceremony, the official said.
Gulf Arab leaders are expected to gather in Saudi Arabia on Tuesday for an annual summit that is expected to announce a deal towards ending the rift.
Under the emerging agreement, the four countries will end the blockade of Qatar, and in exchange, Qatar will not pursue lawsuits related to the blockade, the official said.
"At the signing on the 5th, leadership from the Gulf Cooperation Council plus Egypt will be coming together to sign an agreement that will end the blockade and put an end to the Qatari lawsuits," the official said.
If the deal holds, the Gulf dispute will be added to a string of diplomatic victories achieved by the Kushner team, a list that includes normalization deals last year between Israel and the United Arab Emirates, Bahrain, Sudan and Morocco.
Kushner, who is also Trump's son-in-law, has been working on other normalization deals between Israel and other countries in the Arab world but may run out of time with President-elect Joe Biden due to take over the presidency on Jan. 20.
"It's just a massive breakthrough," the official said. "The blockade will be lifted. It will allow for travel amongst the countries as well as goods. It will lead to more stability in the region."