The League of Arab States recognized Libya's Transitional Council on Thursday and is ready to grant it membership of the organization, regional media quoted Arab League Secretary General Nabil Al-Araby as saying.
The new Libyan government will receive permanent membership in the Arab League, Al-Araby said.
A number of other African states, including Sudan, Egypt, Chad and Ethiopia, have also recognized the rebel Council of Libya as the North African state's sole legitimate government.
The rebels announced that they had gained control of much of the Libyan capital on Tuesday, but whereabouts of Libyan leader, Muammar Gaddafi are still unknown.
The Transitional Council on Wednesday offered an amnesty, as well as a $1.3-million reward for anyone who captures or kills Gaddafi.
The uprising against Gaddafi's forty-year rule began in February. An international military operation "to protect civilians" in Libya began on March 19 following a UN resolution.