The decision was mailed Friday and comes three months after Kenya native Zeituni Onyango, the half-sister of Obama's late father, testified at a closed hearing in Boston, where she arrived in a wheelchair and two doctors testified in support of her case.
Onyango plans to apply for a work visa and can apply for a green card after she gets it, her attorneys said.
The basis for her asylum request was never made public.
People who seek asylum must show that they face persecution in their homeland on the basis of religion, race, nationality, political opinion or membership in a social group.
"The asylum process is confidential and she wants to keep it that way, so we can't get into details on why the judge granted asylum or the exact basis for her claim," said her attorney Scott Bratton. He added: "She doesn't want people to feel sorry for her."
Another lawyer, Margaret Wong of Cleveland, said last year that Onyango first applied for asylum "due to violence in Kenya."
The East African nation is fractured by cycles of electoral violence every five years.
Medical issues also could have played a role. In a November interview with The Associated Press, Onyango said she was disabled and was learning to walk again after being paralyzed from Guillain-Barre syndrome, an autoimmune disorder.
Onyango moved to the United States in 2000. Her first asylum request was rejected, and she was ordered deported in 2004. But she didn't leave the country and continued to live in public housing in Boston.
Onyango's status as an illegal immigrant was revealed just days before Obama was elected in November 2008. Obama said he did not know his aunt was living here illegally and believes laws covering the situation should be followed.
A judge later agreed to suspend her deportation order and reopen her asylum case.
Wong has said that Obama wasn't involved in the Boston hearing. Obama spokesman Nick Shapiro said Monday that the White House had no involvement in the case at any point in the process.
In his memoir, "Dreams from My Father: A Story of Race and Inheritance," Obama affectionately referred to Onyango as "Auntie Zeituni" and described meeting her during his 1988 trip to Kenya.
Onyango helped care for the president's half brothers and sister while living with Barack Obama Sr. in Kenya.
