Mr Fayed, who also owns Fulham Football Club, will be told by the Home Secretary, Jack Straw, whether his application meets the criteria laid down by the Home Office.
Speculation about the millionaire's chances of success increased earlier this year when his brother Ali was granted citizenship by Mr Straw.
However, Mr Fayed's confidence was hit when Mr Straw announced in March that he was delaying a decision pending more details about his case.
The Home Secretary has, however, discounted the damning criticisms of Mr Fayed and his brother Ali made in 1988 by Department of Trade inspectors looking into their takeover of Harrods and the House of Fraser chain.
The criticisms, ignored now because of the time elapsed since the report, are believed to have played a part in the rejection of the brothers' citizenship applications in 1995 when the Conservatives were in power.
Mr Fayed has also admitted bribing MPs to ask questions in the House of Commons in the "cash for questions" scandal that tarnished John Major's government.
It is understood that the two main issues that had to be resolved by Mr Straw, who acts in a quasi-judicial rather than a political capacity, were the "cash for questions" affair and the opening of safety deposit boxes of Mr Fayed's arch business rival, the late Tiny Rowland.
Mr Fayed, whose chief operating officer at Fulham, Kevin Keegan, is also coach of England, infuriated MPs in February when he said: "I've given you my Keegan, now can I have my British passport?"
Since his son, Dodi, died alongside Diana, Princess of Wales, Mr Fayed has upset the Royal Family by suggesting the couple were killed by security services in a "conspiracy".