The decision could spare White House correspondent Matthew Cooper, who has refused to turn over the documents for fear of revealing confidential sources, four months in jail.
On Wednesday, a federal district judge overseeing the criminal investigation gave Cooper and New York Times reporter Judith Miller, who is also facing a contempt of court charge, a week to comply before handing down his sentence.
Earlier, the Supreme Court refused to overturn an appeals court ruling that the two reporters should serve jail time for refusing to reveal their sources.
The investigation has raised questions about the First Amendment and the rights of reporters to protect confidential sources.
On Thursday, Time said though it disagreed with the Supreme Court's ruling, the magazine is not "above the law."
"[T]he Supreme Court has limited press freedom in ways that will have a chilling effect on our work and that may damage the free flow of information that is so necessary in a democratic society," Time Inc.'s editor in chief Norman Pearlstine said in a statement.
But, "The same Constitution that protects the freedom of the press requires obedience to final decisions of the courts and respect for their rulings and judgments," the statement said. "That Time Inc. strongly disagrees with the courts provides no immunity."
In a statement, New York Times publisher Arthur Sulzberger Jr., said his paper is "disappointed" by Time's announcement.
"We are deeply disappointed by Time Inc.'s decision to deliver the subpoenaed records. We faced similar pressures n 1978 when both our reporter Myron Farber and The Times Co. were held in contempt of court for refusing to provide the names of confidential sources. Mr. Farber served 40 days in jail and we were forced to pay significant fines."
Unlike Time Inc., the Times has not been named as a defendant in the Plame case because the paper did not publish a story about the operative.
"Our focus is now on our own reporter, Judith Miller, and in supporting her during this difficult time," Sulzberger said in the statement.
Though Miller did not comment Thursday, in a September 2004 Editor&Publisher article, she did hint that she would rather serve jail time than reveal her sources.
In an interview with the Associated Press, Pearlstine said the magazine would likely turn over Cooper's notes, e-mails and other records. Cooper has refused to do so of his own accord and said during a previous court hearing he hoped the magazine would not.
"On balance, I think I'd prefer they not turn over the documents but Time can make that decision for itself," he said Wednesday, the Associated Press reported.
The investigation over who leaked Plame's identity began in 2003 when former U.S. diplomat Joseph Wilson wrote an opinion piece in the Times criticizing President Bush's motives for going to war in Iraq and discounting the president's claim that Iraq had tried to buy materials for weapons of mass destruction, specifically uranium, in Niger.
Soon after the piece was published, syndicated columnist Robert Novak published an article revealing Plame's name and claiming that two senior administration officials told him Plame, Wilson's wife, was a CIA operative.
Both Miller and Cooper conducted interviews based on Novak's story but only Cooper published his. Novak is not facing contempt of court charges, leading to speculation that he may already have complied with the special prosecutor in the case, the New York Times reported.
Novak has not commented on the case but has promised to "reveal all" once the investigation is concluded, according to the AP.