Officials said the paperwork has been completed, after which 11 activists and the eight-member crew of the Rachel Corrie will be sent home as early as Sunday, the BBC reported.
The Rachel Corrie was stopped and boarded by Israeli troops Saturday as it attempted to sail into Gaza with supplies intended for the civilian population.
The encounter came in the wake of a similar attempt by a Turkish vessel that ended with an attack on the Israeli boarding party and the deaths of nine activists.
Gaza has been under an Israeli blockade aimed at preventing weapons from reaching Palestinian militants.
Israeli Prime Minister Benjamin Netanyahu said a cabinet meeting Sunday that the people who attacked Israeli commandos aboard the ship Mavi Marmara were apparently militants themselves who slipped aboard the ship separately, Ynetnews.com reported.
Social Affairs Minister Issac Herzog said at the meeting that the clashes indicated the need to find an alternative security arrangement that would enable Israel to eventually end the blockade.