The decision came a day after Arafat's widow, Suha, asked that her husband's body be exhumed amid claims published by Arabic broadcaster al-Jazeera that Arafat's personal belongings contained abnormally high levels of polonium.
"There is no religious or political reason that prevents further investigation into this matter, including exhuming his body by a specialized and trusted party at the request and approval of his family," Palestinian Authority spokesman Nabil Abu Rudeineh told the official Palestinian news agency Wafa.
Palestinian official Saeb Erekat told the Ma'an news agency that an international committee will be formed to investigate the late leader's death.
The Institute of Radiation Physics at the University of Lausanne in Switzerland tested small stains of Arafat's blood, sweat, saliva and urine found on his clothes, toothbrush and traditional iconic headdress the kaffiyeh, al-Jazeera said.
Tests completed last month concluded that 60 percent to 80 percent of the polonium found in the samples was "unsupported," meaning it did not come from natural sources, al-Jazeera said.
"I can confirm to you that we measured an unexplained, elevated amount of unsupported polonium-210 in the belongings of Mr. Arafat that contained stains of biological fluids," Institute Director Dr. Francois Bochud told the network.
If tests show Arafat's bones contain high levels of polonium, it would indicate it was possible he was poisoned, al-Jazeera said, citing doctors.
Arafat -- a Palestine Liberation Organization chairman who shared the 1994 Nobel Peace Prize with Israeli Prime Minister Yitzhak Rabin and Israeli Foreign Minister Shimon Peres -- died in a French military hospital Nov. 11, 2004, at age 75 after becoming ill with a mysterious illness.
No autopsy was performed.