U.S. officials say the Obama administration is planning to remove an Iranian militant group once allied with former Iraqi President Saddam Hussein from the U.S. terrorism list.

A court had given Secretary of State Hillary Clinton until October 1 to decide the fate of Mujahedeen-e-Khalq, also known as the People's Mujahedeen Organization of Iran or MEK. But unnamed sources said Tuesday she has already decided to take the group off the terrorism list.

The move will end years of high-profile campaigning from the group but is expected to anger the Iranian government.

Iran and Iraq's current Shi'ite-led government consider the People's Mujahedeen a terrorist organization. Under Saddam Hussein, Iraq gave the MEK shelter after the Iranian revolution in 1979, and some group members were accused of helping Saddam crush a Shi'ite revolt about 20 years ago.