Russia warned last month that it would not send a delegation to the luxury Swiss ski resort town to mingle with the global business elite in January if top Russian oligarchs facing US sanctions were kept out.
The pressure appeared to work, with WEF announcing the sanctioned tycoons would now be welcome to attend the conference.
"I am pleased that after discussions with all relevant parties, careful consideration of international legal frameworks and strong support from the Swiss government, we are able to host business and political leaders from all G20 countries," said Alois Zwinggi, WEF's head of compliance, in a statement sent to the AFP news agency on Monday.
He stressed that this was "essential", since to "address the pressing global challenges, we need all relevant parties at the Annual Meeting."
Following the shift, he said WEF was "pleased to learn that Russia also will send a high level governmental delegation to Davos."
"Should the delegation include individuals under sanction, all necessary measures have been undertaken to ensure that their presence would be fully compliant with current legal conditions," he added.
Moscow hailed the news.
"We welcome the fact that the Davos Economic Forum and its leaders have heard our position," Kremlin spokesman Dmitry Peskov told reporters on Monday. But while Peskov confirmed that the government would resume preparations for the forum, he said was too early to say who will head the Russian delegation.
He spoke after The Bell, a respected Russian media outlet, reported that Kremlin-backed tycoons Oleg Deripaska, Viktor Vekselberg and Andrei Kostin would be allowed to take part in the forum, but only on a number of conditions developed with the help of US lawyers.
Those conditions reportedly include not permitting any payments related to the tycoons to go through US banks, and blocking them from taking part in any meetings organised by Americans at the forum.
"Contacts with American entrepreneurs can be easily replaced by entrepreneurs from other countries," Peskov said when asked to comment on the reported conditions.
Spokespeople for the three tycoons, who were hit with US sanctions earlier this year, have yet to comment on the development or say whether they will attend the meeting.