US intelligence learned of the plot from a laptop computer belonging to a Bahraini jihadist captured in Saudi Arabia in early 2003, says author Ron Suskind in his book The One Percent Doctrine.
The computer contained plans for an easily constructed and concealed device that releases deadly hydrogen-cyanide gas using a remote trigger, the book says.
"In the world of terrorist weaponry," writes Suskind, "this was the equivalent of splitting the atom. Obtain a few widely available chemicals, and you could construct it with a trip to Home Depot - and then kill everyone in the store."
The CIA built a prototype of the captured design and showed it to George Bush, the US president, who ordered that alerts be sent through all levels of the US government, the book says.
The information contained plans for a gas-dispersal system dubbed the mubtakkar (Arabic for device), Time said.
The deadly device was made up of two separate chambers for sodium cyanide and a stable source of hydrogen, such as hydrochloric acid.
A seal between the two chambers could be broken by a remote trigger, producing the toxic gas for dispersal.
Al-Qaeda 'planned to place gas-
delivery devices in subway cars'
Easily concealed, the device could inflict mass casualties if it were triggered in an enclosed public space, according to the excerpt.
US intelligence learned from an al-Qaeda informant that the attack had been called off by Osama bin Laden's deputy, Ayman al-Zawahiri, 45 days before it was set to occur.
Al-Qaeda had planned to place several of the poison-gas devices in subway cars and other strategic locations.
The informant, a management-level al-Qaeda operative who believed his leaders had erred in attacking the US directly, told US agents he did not know why al-Zawahiri scrapped the plan.
Time said it would post an excerpt of Suskind's book, published by Simon and Schuster, early on Sunday morning on its website time.com.
The latest issue of Time hits newsstands on Monday.