But Kerry also made clear in Cairo the Obama administration will monitoring Egyptian President Mohammed on how he honors his commitments, Haaretz reported.
The newspaper said releasing the funding was a reward for Morsi's vow to enact political and economic reforms.
Egypt is trying to meet conditions for a $4.8 billion loan from the International Monetary Fund. Haaretz said an IMF agreement would unblock more of the $1 billion in U.S. aid promised by U.S. President Obama last year.
Kerry was scheduled to head to Saudi Arabia Sunday, later touching down in the United Arab Emirates and Qatar. In Qatar, Kerry was expected to focus on the civil war in Syria.
The U.S. secretary of state is set to return to Washington Wednesday.