Controversial Muslim cleric Abu Hamza al-Masri is to face terrorism charges in the UK, effectively putting US attempts to extradite him on hold.
The London preacher has been in Belmarsh prison since May when the US requested his extradition on terrorism related matters.
But the British legal process will take precedence over the extradition hearing which had been due to start next week.
It is not yet know exactly what charges Mr Abu Hamza, 47, will face.
The Crown Prosecution Service confirmed it had advised the police of its decision and it was up to them to inform all parties concerned.
BBC correspondent Andy Tighe said police had not yet officially charged Mr Abu Hamza, and would have to decide whether to do so in Belmarsh or a police station.
British authorities have said their investigation of the cleric pre-dates the Americans' interest in him.
He said: "The British authorities were running out of time if they did want to charge Abu Hamza and in a sense 'trump' the Americans.
"Whatever prosecutions are made in this country under the English legal system has precedence over whatever the Americans want him for."
The Egyptian-born cleric, a former preacher at the Finsbury Park Mosque in north London, has always denied any involvement in terrorism.