The International Olympic Committee's executive committee approved the move in Rio on Thursday and will put the plan before the next full IOC session in Kuala Lumpur in July.
"The IOC would ... allow generic, i.e. not Olympic advertising, during the period of the Games which hasn't been allowed till now," said spokesperson Mark Adams.
The move would alter Rule 40 that states "no competitor, coach, trainer or official who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games".
That regulation was seen as overly harsh by some athletes who took to social media to criticise it during London 2012.
(Reporting by Andrew Downie, editing by Tony Jimenez)
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