Hamdan will be returned to Yemen over the next two days, and is expected to serve out the remainder of his prison sentence in a Yemeni prison until Dec. 27, when he will be released to his family.
Hamdan was captured in Afghanistan in 2001. He was taken to Guantanamo Bay in May 2002 and named as one of the first prisoners to face prosecution. His case has been the subject of repeated court battles, including a Supreme Court ruling that struck down an earlier version of the tribunal system.
In August, a military jury of six sentenced Hamdan to 5 1/2 years in prison, making him eligible for parole in six months on charges of providing material support for terrorism. He was acquitted of more serious conspiracy charges.
Hamdan's reported transfer comes days after a federal judge ordered the release of Lakhdar Boumediene, whose Supreme Court case last summer gave the Guantanamo detainees the right to launch legal challenges to their imprisonment.
Charles Swift, one of Hamdan's attorneys, did not confirm the transfer, but said "they're absolutely doing the right thing" if U.S. officials send Hamdan back to Yemen. "Certainly the fair thing to do it to return him," Swift told the Washington Post.
A defense official, speaking anonymously, told the Washington Post the decision was largely based on political advantages to be made with the Yemeni government.
"We haven't been comfortable with Yemen's track record on Guantanamo detainees," the official said, in reference to some ten other Yemeni detainees who have been returned to their country. "This will be good to show us if they have the political will to work with us on the remaining population," he said, according to the Post. "It's a good opportunity for them."
Nearly 90 other Yemeni suspects continue to be held at Guantanamo Bay. The Washington Post also reported that Yemen is working to set up a rehabilitation program for released terrorism suspects.
More Guantanamo detainees have been returned to Saudi Arabia, which runs a rehabilitation system to help find former detainees jobs and spouses, the New York Times reported.
Waleed Alshahari, who oversees Guantanamo Bay issues for the Yemen Embassy, said the decision is indicative of President-elect Barack Obama's plan to begin preparations to close the prison, a priority Mr. Obama has emphasized throughout his campaign.
"It seems the new administration wants to close the prison, so there will be negotiations with them," Alshahari said to the Associated Press.
Guantanamo prosecutors had initially sought a sentence of 30 years to life for Hamdan, whose trial began the special commission system in July. They also had argued that as an "enemy combatant" he should not receive credit for his time detained there. A military judge rejected that argument.