Pope Francis confirmed the news on the occasion of his birthday
Mother Teresa is going to be made a saint.
She will be canonised in September 2016.
It comes after Pope Francis approved a decree recognising a miracle carried out by Mother Teresa - it is claimed she healed a man suffering from multiple brain tumours.
Avvenire, an Italian newspaper affiliated with the Italian Catholic bishops conference says Pope Francis confirmed the decision on the occasion of the Pope's birthday yesterday.
Pope John Paul beatified her in 2003, which is the step before sainthood. Canonisation requires one more miracle after beatification.
Known as the "saint of the gutters", Nobel Peace Prize winner Mother Teresa was renowned for her work with the poor in Calcutta.
She died in 1997 at the age of 87.
The canonisation is expected to be sometime later next year.
In December 2008 the patient was in a coma and dying and various treatments had been ineffective.
The patient’s wife is said to have continuously sought the intercession of Mother Teresa for her husband.
He was wheeled into the operating theatre for emergency surgery at 18:10 on 9 December 2008 .
At the same time, his wife went to her church and along with the pastor begged Mother Teresa for the cure of her dying husband.
At 18:40 the neurosurgeon returned to the operating room and found the patient inexplicably awake and without pain.
He asked the doctor: "What I am doing here?"
The next morning he was examined, fully awake and without any headache.
On 10 September this year, the medical commission voted unanimously that his cure was inexplicable in the light of current medical knowledge.
The man, now completely healed, resumed his work as a mechanical engineer without any particular limitation.