WASHINGTON — President Barack Obama is expected to sign an executive order on Monday reversing restrictions on federal funding of human embryonic stem-cell research.

In Madison, where the cells were first derived in 1998 by University of Wisconsin-Madison researcher James Thomson, the long-expected move should expand stem-cell research even as it diminishes the use of Thomson’s cells nationwide, a campus scientist said.

"The demand for (Thomson’s) cells will decrease," said Dr. Tim Kamp, co-director of the university’s Stem Cell and Regenerative Medicine Center. "But this will allow us to use stem-cell lines that were derived under more optimal conditions."

Many newer stem cells, including some developed with private money at UW-Madison, are free from animal products and have more genetic diversity, said Kamp, who studies heart disease. That makes them better suited for eventual studies in people, he said.

Kamp said he and other researchers at UW-Madison and elsewhere hope to tap into federal stimulus money that could be used for stem-cell research.

Nationally, Obama’s announcement is likely to stir up not only the promise of scientific breakthrough but also the controversy over where government draws a moral line.

Obama will hold an event at the White House to announce the move, a senior administration official said Friday. The official spoke on condition of anonymity because the policy had not yet been publicly announced.

Under President George W. Bush, federal money for research on human embryonic stems cells was limited to those stem-cell lines that were created before Aug. 9, 2001 — a cutoff that included Thomson’s stem-cell lines. From that point forward, no federal dollars could be used on research with cell lines created in a way that destroyed embryos.

Obama’s move is expected to lift that restriction. The official said the aim of the policy is restore "scientific integrity" to the process.

Embryonic stem cells are master cells that can morph into any cell of the body. Scientists hope to harness them so they can create replacement tissues to treat a variety of diseases — such as new insulin-producing cells for diabetics or new nerve connections to restore movement after spinal injury.

"I feel vindicated after eight years of struggle, and I know it’s going to energize my research team," said Dr. George Daley of the Harvard Stem Cell Institute and Children’s Hospital of Boston, a leading stem-cell researcher.

Such research is controversial because embryos must be destroyed to obtain the cells; they typically are culled from fertility-clinic leftovers otherwise destined to be thrown away. Once a group of stem cells is culled, it can be kept alive and propagating in lab dishes for years.

There are different types of stem cells, and critics say the nation should pursue alternatives to embryonic ones such as adult stem cells, or those found floating in amniotic fluid or the placenta.

Another alternative is induced pluripotent stem cells, or iPS cells, which are skin cells reprogrammed back to their embryonic state. Thomson and Junying Yu of UW-Madison and Japanese researcher Shinya Yamanaka were the first to create those cells in 2007.

But leading researchers consider embryonic stem cells the most flexible, and thus most promising, form — and say that science, not politics, should ultimately judge.

"Science works best and patients are served best by having all the tools at our disposal," Daley said.

Kamp, of UW-Madison, said embryonic stem cells "remain the gold standard." Scientists still aren’t sure if iPS cells hold up as well as embryonic stem cells, he said.

Obama made it clear during the campaign he would overturn Bush’s directive, adding that he would "ensure that all research on stem cells is conducted ethically and with rigorous oversight."

The ruling will bring one immediate change: As of Monday, scientists who’ve had to meticulously keep separate their federally funded research and their privately funded stem cell work — from buying separate microscopes to even setting up labs in different buildings — won’t have that expensive hurdle anymore.

Next, scientists can start applying for research grants from the National Institutes of Health. The NIH already has begun writing guidelines for what embryonic stem cell lines will qualify under Obama’s ruling. Among other things, the guidelines are expected to demand that the cells were derived with proper informed consent from the woman or couple who donated the original embryo.

—State Journal reporter David Wahlberg contributed to this story.