Open this photo in gallery In this file handout photo taken on April 15, 2018 and released by the Saudi Royal Palace Crown Prince of Saudi Arabia Mohammed bin Salman Al-Saud attends the 29th Arab League Summit in Dhahran. BANDAR AL-JALOUD/AFP PHOTO / Saudi Royal Palace

More than 1,000 Saudi Arabian medical graduates will be allowed to stay in Canada to complete their training, a much-needed reprieve for teaching hospitals that were unsure how they would handle the sudden and significant loss of staff.

Thousands of other Saudi students studying at Canadian universities will, however, still have to leave the country.

Related: Saudi Arabia-Canada spat: What we know so far

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The 1,053 Saudi medical residents and fellows in Canada received an e-mail late Monday afternoon from the Saudi Ministry of Education “indicating that they may continue in their positions until an alternative assignment is arranged,” said Andrew Padmos, chief executive of the Royal College of Physicians and Surgeons of Canada.

The kingdom initially told the medical trainees to leave Canada by Aug. 31 because of a diplomatic dispute that erupted after Foreign Affairs Minister Chrystia Freeland publicly called on Saudi Arabia to release jailed human-rights activists. Last week, the deadline was extended to Sept. 22.

Residency and trainee programs begin every year on July 1, and those in the programs must complete at least six months to be eligible to write exams.

While Monday’s e-mail stipulates that the Saudi medical graduates are to remain in Canada only until they can find alternative arrangements in another country, in reality many of them will likely be able to complete their training here, said Paul-Émile Cloutier, president and CEO of HealthCareCAN, which represents hospitals across the country. For instance, some residents and fellows are entering their last year of training. For others, it could take several years before they can find a training spot in a foreign city, which means they will end up finishing in Canada.

The development is good news for the Saudi medical graduates as well as the Canadian hospitals that rely on their service, Mr. Cloutier said. For decades, Canada has had a program under which the kingdom pays substantial sums to allow Saudi medical graduates to train at Canadian teaching hospitals. The doctors-in-training gain valuable experience and provide care to patients in Canada.

Ordering the trainees out of Canada would have jeopardized their future careers and forced hospitals to look for ways to fill the gaps left by their sudden departure, Mr. Cloutier said.

“The hospitals that have many of these trainees will continue as is. You don’t have to scramble,” he said.

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Dr. Padmos said the biggest beneficiaries are the trainees themselves, who risked having their careers derailed.

“Saudi officials are showing support for their own trainees. I don’t think this implies they are retreating in any way,” Dr. Padmos said.

“I also believe this move creates an opportunity for the two sides to settle their differences,” he added.

But some of the Saudi Arabian medical graduates have already left Canada. It’s unclear what will happen in those cases, Mr. Cloutier said. It’s also unclear whether Saudi residents and fellows scheduled to start programs in Canada this year will be able to, he added.