The Broadway League, which represents theatre owners and producers, has backtracked and will ask theatres to dim their lights in honour of Joan Rivers.
The league had said on Monday that Rivers did not meet the criteria for the honour, triggering a controversy when several theatre owners said they would turn off their marquee lights on Tuesday anyway.
An online petition was launched and several celebrities came out in favour of granting the honour.
The league changed course on Tuesday afternoon, saying the lights would dim at 6.45pm for one minute.
"Joan Rivers loved Broadway and we loved her," Charlotte St Martin, the league's executive director, said in a statement.
"Due to the outpouring of love and respect for Joan Rivers from our community and from her friends and fans worldwide, the marquees of Broadway theatres in New York will be dimmed in her memory tonight."
Rivers, who died on Thursday at 81, was known primarily as a TV actress and comedian, though she was seen as a champion of Broadway and off-Broadway shows and earned a Tony Award nomination.
Before the league's reversal, 10 theatres - out of 40 - were set to break with the league and dim their lights.
Theatre producer Tom D'Angora had started an online petition asking the league to reverse its decision.
"I promise you, the majority of the community wants to thank and honour her," said D'Angora.
The controversy triggered the creation of the Twitter hashtags #dimthelightsforJoan and #Dim4Joan.
Celebrities including Cyndi Lauper, Harvey Fierstein and Donna Murphy came out in favour of the honour.
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