The White House confirmed Thursday that Obama would veto the legislation -- unanimously passed by Congress -- allowing 9/11 families to launch civil suits against Riyadh.
"We believe this is a bad bill," said White House spokesman Josh Earnest. "It's why the president's going to veto it."
The White House argues the legislation would undermine sovereign immunity and potentially expose US officials and service members to litigation.
That technical legal argument will struggle to be heard over emotive accusations that Obama is putting relations with Saudi Arabia before 9/11 victims.
Republican nominee Donald Trump has already tried to paint Obama and his would-be successor Hillary Clinton as weak on terrorism.
Clinton has preemptively voiced support for congressional efforts "to secure the ability of 9/11 families and other victims of terror to hold accountable those responsible," according to Jesse Lehrich, a campaign spokesman.
But with the election less than 50 days away, the Republican-led Congress will try to deal Obama a significant political blow by overriding his veto.
Such overrides are rare and this one would show the White House to be almost cripplingly weak as Obama tries to tick off remaining legislative goals in the twilight of his presidency.
Obama has issued 11 vetoes so far in his presidency, none of which have garnered the two-thirds opposition needed for an override.
But Republicans will need the backing of Democratic lawmakers, who the White House is lobbying furiously.
Congressional sources said Thursday that White House appeals to security minded senators like Dianne Feinstein may have been enough to avoid a override vote.
That would be a blow to families of 9/11 victims, who have campaigned for the law -- convinced that the Saudi government had a hand in the attacks that killed almost 3,000 people.
Fifteen of the 19 hijackers were Saudi citizens.
Declassified documents showed US intelligence had multiple suspicions about links between the Saudi government and the attackers, but no link has definitively been proven.
"While in the United States, some of the 9/11 hijackers were in contact with, and received support or assistance from, individuals who may be connected to the Saudi government," a finding read.
But a victory for the White House could help ease relations with Saudi Arabia , already strained by Obama's engagement with Iran and the July release of a secret report on Saudi's involvement in the attacks.
A senior Saudi Prince reportedly threatened to pull billions of dollars out of US assets if it becomes law, but Saudi officials now distance themselves from that alledged threat.
The White House is getting some backing from diplomatic allies who share concerns about the United States becoming a venue for citizens to sue governments.
In a diplomatic protest note, the European Union warned the rules would be "in conflict with fundamental principles of international law."
"State immunity is a central pillar of the international legal order," the "demarche" noted, adding that other countries could take "reciprocal action."
In a letter to lawmakers, former secretary of defense William Cohen, former CIA boss Michael Morell and Stephen Hadley, George W. Bush's national security advisor were among a group of high profile security figures to warn the legislation would hurt US interests.
"Our national security interests, our capacity to fight terrorism and our leadership role in the world would be put in serious jeopardy," they said.