The decision comes ahead of a court hearing set for next week at which Justice Department prosecutors had been directed to reveal whether they plan to seek Risen's testimony.
The person briefed on the matter, who spoke to The Associated Press on condition of anonymity because the decision had not yet been formally announced, said the Justice Department may still subpoena Risen to answer other questions in the case but would not compel him to disclose the identity of his source.
Risen's reporting has been at the centre of a years-long conflict with the federal government that has contributed to a debate about the line between national security and press freedoms.
Prosecutors allege that Jeffrey Sterling, who is scheduled for trial next month in federal court in Virginia, was a key source in Risen's 2006 book "State of War," which detailed a botched CIA effort during the Clinton administration to thwart Iran's nuclear ambitions. Risen has refused to reveal his sources despite being subpoenaed by the government and did not testify before the federal grand jury that indicted Sterling in 2010.
The trial has long been delayed while lawyers have debated whether Risen enjoys any kind of immunity from being compelled to testify about his interactions with anonymous sources. In June, the Supreme Court let stand a ruling from a federal appellate court that Risen could be subpoenaed and rejected his bid to get the justices to clarify whether journalists have a right to protect their confidential sources.
It's not clear what the Justice Department's decision will mean for the case against Sterling, which is set for trial on Jan. 12.
"We are waiting for the formal response as ordered by the court," one of Sterling's lawyers, Edward MacMahon, wrote in an emailed statement. "If the result is that the Attorney General does not want to issue the subpoena that his own Department of Justice fought for all the way to the Supreme Court, then three years of Mr. Sterling's life have been wasted in litigation."
Attorney General Eric Holder has said no reporter would be sent to jail for doing his or her job, but he has faced repeated criticism for the Justice Department's handling of national security leak investigations during his tenure.
In 2013, the government secretly subpoenaed records of telephone lines used by AP journalists as part of its investigation into who leaked information for a 2012 story about a foiled plot in Yemen to bomb a U.S.-bound airliner. The Justice Department also secretly used a warrant to obtain the emails of a Fox News reporter, a decision Holder singled out in October as one he wished "could have been done differently."
The fallout of those cases led the Justice Department to issue new guidelines for obtaining records from news media organizations in leak investigations.
In the Risen matter, Holder had said he was optimistic that the situation could be defused in an acceptable way for both sides.
Earlier this week, U.S. District Judge Leonie Brinkema ordered prosecutors to state at a Dec. 16 hearing whether they planned to call Risen as a witness and also asked them to reveal "any conditions or limitations" they had worked out with his attorneys. She said the Justice Department has had more than six months to decide whether it would subpoena Risen to testify at trial.
"Because Mr. Risen's presence or absence at the trial will have a significant impact on how the parties present their case, a decision about Mr. Risen must be made sufficiently before trial to enable the parties to prepare adequately," she wrote in the order.
An email message sent to Risen was not immediately returned.
The Justice Department's decision was first reported by NBC News.
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