Salafist politician Hazem Abu Ismail looks set to rejoin the presidential race after a court ruled on Wednesday that his mother was not a US citizen, the official MENA news agency reported.
Under the country's electoral law, all candidates for the presidency, their parents and their wives must have only Egyptian citizenship.
Egypt's first presidential election since a popular uprising toppled president Hosni Mubarak last year is scheduled for May 23 and 24.
Abu Ismail's candidacy was in doubt last week when the electoral commission said that his mother, Nawal Abdel Aziz Nur, had obtained US citizenship in October 2006, which Abu Ismail repeatedly denied.
The Cairo administrative court "has ordered the interior ministry to issue a certificate... to show that (Abu Ismail's) mother has never held another nationality other than her Egyptian nationality," MENA said.
"Hazem Abu Ismail has become a candidate again," state TV said.
Outside the courthouse in central Cairo, thousands of supporters carrying Abu Ismail posters and waving Egyptian flags chanted "Allahu Akbar" (God is the Greatest).
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"Here is the president," they shouted, as they set off fireworks in the crowded Dokki neighbourhood in Cairo, where traffic had ground to a halt.
"The ruling is (Abu Ismail's) first vicitory in the presidential race," said Khaled Shawki, 38, who runs Abu Ismail's campaign in Helwan, south of Cairo.
"Muslims in Egypt and particularly Salafists do not pose a threat to anyone," said Amr al-Naggar, a 26-year-old student of medicine.
The electoral commission will later this week examine the candidacy papers and issue a final list of approved candidates on April 26.
Abu Ismail advocates a strict interpretation of Islam similar to the one practised in Saudi Arabia and has become a familiar sight in Cairo, with his posters adorning many cars and micro buses.
Abu Ismail would compete with more moderate Islamist candidates such as senior Muslim Brotherhood figure Khairat El-Shater and ex-Brotherhood member Abdel Moneim Abul Fotouh, as well as former regime figures such as ex-intelligence chief Omar Suleiman and former foreign minister Amr Mussa.
Islamists have made big strides since Mubarak's ouster, winning majorities in elections to both houses of parliament.
The Muslim Broterhood's Freedom and Justice Party won the most seats in parliamentary elections earlier this year, but the Salafists captured nearly a quarter themselves.