The company's biggest Gulf market with 700,000 users, Saudi Arabia had threatened to ban the service last Friday before giving RIM until Monday as it worked with local firms testing servers.
In light of the positive developments in completing part of the regulatory requirements from the service providers, the regulatory authority has decided to allow the continuation of the BlackBerry Messenger services, the regulator said in a statement on the state-run Saudi Press Agency.
It will continue working with the service providers to complete the rest of the regulatory requirements, the Communications and Information Telecommunications Commission (CITC) said.
CITC spokesman Sultan al-Malik declined to give more details.
Saudi Arabia, like neighbors United Arab Emirates, Kuwait and others including India, has expressed concern that BlackBerry's encrypted messaging could be used to harm social and national security interests.
The regulator did not say whether it had reached an explicit agreement with RIM to address its national security concerns.
If the two sides reach a compromise, analysts expect the regulator to scrap its planned ban on Messenger, though they say installing local servers could still disrupt services for weeks.
BlackBerry, unlike rivals Nokia and Apple, operates its own network through facilities in Canada and the UK.
Top Saudi operator Saudi Telecom Co and rival Mobily were not immediately available for comment.
A CITC official said on Sunday that Canada's RIM and Saudi mobile firms were testing three servers through which data and communications coming in and out of Saudi Arabia would transit in addition to RIM's server in Canada.
(Editing by Dinesh Nair and Jason Neely)