Sami Umar al-Husayin, a Saudi citizen who has been in custody since his arrest on 26 February, will be arraigned on Monday in US District Court in Boise.
If convicted, he could receive 15 years in a federal prison.
A grand jury, a group of citizens which hears arguments from prosecutors, issued the charge on Friday.
The indictment said al-Husayin, 34, set up Web sites for Islamic organisations that espoused violence against the United States and that he tried to raise funds and recruit new members for a violent holy war, or jihad, in Israel, Chechnya and elsewhere.
The indictment contends al-Husayin maintained bank accounts which he used to funnel at least $300,000 to the Islamic Assembly of North America.
The government claims the group has raised and sent money to support "terrorist-related" activities starting in February 2000.
In previous hearings, defence attorneys said there was no evidence al-Husayin did anything other than give money to legitimate charities and do some basic Web site maintenance for Islamic organisations.
US Muslims complained of
prejudiced policing after 911
Friends, supporters, colleagues, and university officials have testified al-Husayin is a peaceful person who has a strong desire to clear his name and finish his studies.
"The raid happened in a SWAT-team kind of setup," said Cynthia Miller, an Idaho lawyer who represented al-Husayin in initial court appearances.
“We are talking about a family man with three small children who gets up and prays at dawn every morning.”
Professor Elizabeth Brandt of the University of Idaho College of Law said in a letter sent to the Arab News that the indictment of al-Husayin itself "does not comport with the university's understanding of him."
She and others recalled al-Husayin as a vocal critic of the 11 September attacks, a man who coordinated a blood drive for victims and walked in a town vigil dedicated to their memory.
"I do not know what evidence they have," said Michael Whiteman, who directs the University of Idaho's international programmes. ““An indictment," he said, "is an accusation."
Al-Husayin, 34, got his undergraduate degree before coming to the United States. He had been a student at various universities in the United States for more than nine years.
Most recently, he has been seeking a PhD in computer security at the University of Idaho.
Al-Husayin's wife and children have agreed to leave the United States by mid-March. The move came after the Bureau of Immigration and Customs Enforcement started deportation proceedings against them.