Transit officials say an ad it initially rejected for its "demeaning" language is expected to appear at 10 subway stations next week.
Metropolitan Transportation Authority spokesman Aaron Donovan told The New York Times "Our hands are tied."
A Manhattan federal court judge ruled in July that the MTA violated the First Amendment rights of the group seeking to place the ad, The American Freedom Defense Initiative.
The ad states "In any war between the civilized man and the savage, support the civilized man." It adds, "Support Israel. Defeat Jihad," in between two Stars of David.
Donovan said the MTA might consider revising its ad policy at its board meeting next week.
New York's Council on American-Islamic Relations called the ad an attempt to "define Muslims" through hate speech.