Khalid Sheikh Mohammed, the alleged mastermind behind the September 11, 2001, attacks, will be tried by a military commission in Guantanamo Bay instead of in a US civilian court.
The news comes as a major reversal for the administration of Barack Obama, the US president.
In making the announcement on Monday, Eric Holder, US attorney-general, repeated his belief that federal courts are the best place to prosecute terrorism suspects but said the government's hands "were tied" by Congress, which in December adopted restrictions on prosecuting Guantanamo prisoners in civilian courts.
"And we simply cannot allow a trial to be delayed any longer for the victims of the 9/11 attacks or for their family members who have waited for nearly a decade for justice," he said.
Holder said in late 2009 that Mohammed and four of his alleged co-conspirators would be tried in a federal civilian court in the heart of New York City, near the site of the World Trade Center attack that killed nearly 3,000 people.
But the earlier decision - although welcomed by civil rights groups - also sparked concerns about security and giving the suspects full US legal rights. It was strongly opposed by many legislators, especially Republicans.
Ramzi Kassem, a professor of Law at the City University of New York, who has also represented a number of Guantanamo detainees, told Al Jazeera the reversal was "all politically motivated nonsense ".
"What we have today is the Department of Justice caving to pressure from to the West Wing ... It's a sad day for the rule of law in this country."
In moving the case back to the military system, the Justice Department unsealed a nine-count criminal indictment that detailed how Mohammed trained the 9/11 hijackers to use short-bladed knives by killing sheep and camels.
Kassem said "things like hearsay and forced evidence will come in very easily in military commissions where as they would not come in on regular court".
But he also said: "for people like the men at Guantanamo it really doesn't make much of a difference whether its military commissions or regular courts. They're both pretty damning when it comes to terrorism cases."
The family members of more than 200 people who died in the September 11 attacks issued a statement on Monday, saying that they are "profoundly disappointed" by the decision to move the trial into the "untested venue of military commissions on Guantanamo".
"We consider this to be a step backward in our hopes that justice will be served and a confirmation of our worst fears - that the shame of Guantanamo will continue," read the statement from the group, which calls itself the September 11th Families for Peaceful Tomorrows.
But the decision to try the five men before military commissions was praised in New York and Washington. New York City Mayor Michael Bloomberg said the cost of holding and securing the trials in Manhattan would have been near "a billion dollars" at a time of tight budgets.
James Carafano, a foreign policy expert at the conservative Heritage Foundation think tank, said a military trial for the five men was "the only rational course of action" and Obama was unlikely to be hurt politically by the decision.
"The [US] public basically just ignores the issue these days. Even overseas, Europeans who were so critical before of Guantanamo have really gone to sleep on the issue," he said.
Captured in Pakistan in 2003 and sent to the Guantanamo detention facility in 2006, Mohammed confessed to being "responsible for the 9/11 Operation" in 2007.
His trial was suspended in 2009 when Obama halted military tribunals. Documents released the same year indicated that Mohammed told military officials he had lied about knowing the whereabouts of al-Qaeda leader Osama bin Laden because he was being tortured by CIA agents.
He said that when he initially told the agents interrogating him that he did not know where bin Laden was, he was being tortured.
Obama on March 7 lifted a two-year freeze on new military trials at the Guantanamo Bay prison facility in Cuba, saying the US Congress was hurting national security by blocking his attempts to move some trials into US civilian courts.
Ahmed Khalfan Ghailani, the first Guantanamo detainee to be tried in a civilian court, was convicted in the autumn of 2009, when he was found not guilty of all but one of the 286 charges against him in connection with the 1998 bombings of two US embassies in Africa.