"We are very pleased. I hope it leads to freedom," Morris Pollard, his father, said from South Bend, Ind.
Israeli Prime Minister Shimon Peres is expected to request Pollard's life sentence be commuted when he meets with President Bill Clinton in Washington Dec. 11.
The late Prime Minister Yitzhak Rabin made the same request on his last trip to the United States in October. Clinton did not respond, and in March 1994 denied a similar request, as did his predecessor, George Bush.
Israeli Interior Minister Ehud Barak announced the Pollard decision Tuesday, after he was named foreign minister in Peres' new Cabinet.
Pollard's first parole hearing was set for earlier this month but was rescheduled, at his request, for January 1996 in hopes the Israeli move would speed his release.
Israel initially denied the citizenship request submitted by Pollard's wife, Esther. She appealed to Israel's Supreme Court, which gave the government 30 days to show cause for the denial, and the government relented.