Malaysia has reversed its decision to slap visa requirements on holders of SAR and British-issued passports.
Prime Minister Dr Mahathir Mohamad said Hong Kong visitors would not need to obtain visas.
Reports of the top-level statement came as Security Secretary Peter Lai Hing-ling said Kuala Lumpur had provided similar advice.
The turnaround comes after Kuala Lumpur revealed in June it would withdraw visa-free access for British National (Overseas) passport holders later this year and not grant it to travellers with the SAR document.
The decision drew protests from Immigration Director Regina Ip Lau Suk-yee who described it as 'unjustified and unnecessary'. The British Government asked Malaysia to reconsider.
The Cabinet decided to drop its ruling requiring travellers to obtain permission, said Malaysia's The Star, quoting Dr Mahathir.
Malaysian Consul-General Zakaria Sulong said yesterday he had no official instructions to confirm the report.
The Hong Kong Government had asked Kuala Lumpur to reconsider the visa requirements, said Mr Lai.
He added: 'In early August, we were informed by the Malaysian Government that they were reviewing our request and, pending a final decision, HKSAR and BNO passport holders would not need to apply for a visa to visit Malaysia.' A final decision was expected later this year, said Mr Lai.
The announcement was made ahead of Chinese premier Li Peng's visit to Malaysia beginning today.
Mr Lai also revealed a visa-free agreement between Argentina and Britain became ineffective on July 1 but Buenos Aires had agreed to continue granting visa-free access to BNO passport holders on an informal basis.
He was responding in writing to a question in the provisional legislature from Dr Leong Che-hung.
Indonesia is reviewing its decision to withdraw visa-free access for BNO passport holders and not grant the travel privilege for SAR document holders.