Amnesty International said a Saudi woman was sentenced to 10 lashes for getting behind the wheel, and had urged the dismantling of the "whole system of women's subordination."
Authorities are not expected to release an official statement, but the woman will not be sentenced, according to a source close to the Royal Court.
A source connected to the country's Interior Ministry also confirmed the revocation.
The move comes just as the country's ruling elite promised greater political participation for women in the Islamic nation.
On Sunday, King Abdullah announced two changes for women that would be historic for Saudi Arabia. He said women will be allowed to serve as members of the Shura Council, the appointed consultative council that advises the king.
He also said women will be allowed to run as candidates and nominate candidates in the next set of municipal elections. It is unknown when those may ultimately take place.
Amnesty said a court in Jeddah handed down the sentence Tuesday. Two other women are believed to be facing charges for driving, one in Jeddah and one in al-Khobar.
The Women2Drive campaign said the woman who was sentenced to 10 lashes has appealed the sentence. She said she did not want to be identified or speak publicly about her case for her own safety.
Women2Drive also said police pulled over women's rights activist Madeah Alajroush for driving in Riyadh on Tuesday. She was taken to police headquarters for questioning and released after she signed a pledge not to drive and called for a taxi home, a statement from Women2Drive said.
The Women2Drive campaign on Facebook and Twitter encouraged women to drive as part of their normal daily activities rather than converge in one place.