A lawyer for some of the defendants on Wednesday said he had been informed that the ban had been lifted but that defendants would have to post bail of roughly USD 330,000.
The move comes only one day after the panel of judges reviewing the case stepped aside for unspecified reasons. None of the defendants have been arrested.
The charges had not been dropped against any of those involved, who include 16 US citizens, 16 Egyptians and German, Palestinian, Serbian and Jordanian citizens.
The activists worked with five foreign NGOs accused of receiving illicit foreign funds and operating without licenses. The defendants and their lawyers have denied the charges, which they said were political.
Social media has reacted to the decision with anger at the "ambiguous move". Evening talkshows raised eyebrows and questions about the independence of judiciary.
Several of the Americans have sought refuge in their Cairo embassy, including Sam LaHood, the head of the US-based International Republican Institute and son of US transportation secretary Ray LaHood.
The trial has led to one of the widest rifts between the US and its ally Egypt in recent history. US legislators threatened that they could imperil more than USD 1.3 billion annual American aid to Egypt, mostly to the military.
US Secretary of State Hillary Clinton told senators on Tuesday that the administration was moving towards a resolving the case "very soon." "We`ve had a lot of very tough conversations and I think we are moving toward a resolution," she had said.
Prosecutors, backed by police, raided the groups` offices in December, confiscating equipment and sealing their doors.
The investigation came as the country`s ruling generals, who took power after an uprising overthrew longtime president Hosni Mubarak a year ago, faced growing protests pressuring them to hand power to civilians immediately.
Fayza Abul Naga, the international cooperation minister believed to be the driving force behind the trial, claimed to investigating judges that the NGOs were part of a US plan to spread chaos in Egypt.
Rights groups have sharply criticised the investigation into the groups and the charges, saying they are part of an orchestrated effort by Egyptian authorities to silence groups critical of the military rulers. Egyptian officials have blamed continuing unrest in the country on foreign interference.