It said Ismail would be accompanied by a senior military officer from the Ministry of Defence.
The Malaysian Government would provide legal assistance if necessary.
"Malaysia has complete faith in the New Zealand legal system and has full confidence that Mr Muhammad Rizalman will be given fair treatment with dignity as provided under the law," the statement said.
The warrant officer and former staff member at the Malaysian High Commission has been charged with burglary and intent to rape, which are punishable by ten years' jail.
He was arrested on May 9 after following a 21-year-old Wellington woman home and allegedly assaulting her.
He was arrested that night and charged the next day in Wellington District Court.
Ismail claimed diplomatic immunity and returned to Malaysia on May 22.
New Zealand Government has maintained that it always wanted Ismail to remain in the country and face the charges.
But miscommunication between New Zealand and Malaysian officials led to Malaysia believing that repatriating Ismail and trying him under a military court was acceptable to New Zealand.
Malaysia's Foreign Minister Anifah Aman said his government was always willing to waive immunity and have Ismail tried in New Zealand.
Ismail is currently in a military hospital in Kuala Lumpur for psychiatric observation.
He was originally expected to face a military Board of Inquiry and potentially a court martial.
Wellington District Police Commander Sam Hoyle said earlier today that police were considering a range of options, including extradition.
Police were working with the Ministry of Foreign Affairs and Trade and Crown Law to establish the legal foundation for extradition.
Mr McCully welcomed the announcement this evening.
"Earlier this evening I spoke with Minister Anifah and he advised me that the Malaysian authorities will be returning the official in question to New Zealand to assist with our investigation," Mr McCully said.
"I want to convey my thanks to the Malaysian Government for this very welcome development which underlines the good faith and integrity with which they have approached this issue.
"There was never any intention by either Government to let this matter rest, and regardless of whether the process took place in Malaysia or New Zealand there was a strong commitment to seeing justice done," Mr McCully said.
"The Malaysian authorities have offered their assistance with the on-going investigation and I welcome their continued involvement.
"It must be noted that the accused has the right to be presumed innocent until proven guilty and deserves the right to a fair trial.
"The young woman involved has been through a great deal and the way this matter has been handled has only added to her suffering. I hope she, and her family, will welcome news that the accused will return to New Zealand so the matter can be fully investigated as was always the Government's intention."
Mr McCully said he would make no further comment on the matter as it was now before the court.
Watch: McCully says sorry to Key
Read the NZ Government's letter to Malaysia here:
Read the response from Malaysia here:
