The movement founded over 80 years back was banned after it was suspected to be involved in a series of political assassinations in the 1950s, including an attempt on the life of Egypt's first republican president, Gamal Abdal Nasser.
As the best-organised political movement in Egypt, the Brotherhood announced on April 30 formation of a "non- theocratic" party, the Freedom and Justice Party, to contest up to half of parliament's seats in a September election.
"The commission on party affairs has given its approval for the formation of the Freedom and Justice Party," said a statement.
The group which was set up in 1928 was officially banned in 1954. After the assassination bid on Abdel Nasser, the members of the group were persecuted for years.
Lately, the movement has adopted a political direction towards a moderate and secular Islamic thought.
The Brotherhood was mostly tolerated and most organised during the rule of former President Hosni Mubarak, who was ousted in a popular revolt on February 11.
It emerged as the largest opposition in the 2005 parliamentary polls, when its candidates who contested as independents as the party was outlawed, won 20 per cent of the seats.