U.S. authorities earlier this year accused Deniss Calovskis, along with suspects from Russia and Romania, of participating in a conspiracy that started in 2005 to create and disseminate the so-called Gozi virus. Once the virus was embedded on victims' computers it siphoned off passwords and bank account information.
Latvian ministers, by a vote of 7 to 5, with one abstaining, approved the extradition of Calovskis, who was born in 1985.
Martins Panke, spokesman for Prime Minister Valdis Dombrovskis, said the country's chief prosecutor told ministers before the vote that there was sufficient evidence to link Calovskis to the crimes.
Many Latvians were vehemently opposed to the idea of extraditing Calovskis since he faces 67 years in prison if found guilty by a U.S. court, which they feel is excessive.
The government decision is final, but Calovskis' lawyer, Saulvedis Varpins, has told Latvian media that he will appeal to the European Court of Human Rights to prevent the extradition.
It was unclear when the extradition could take place, but a Justice Ministry spokeswoman told The Associated Press that it would take at least several days.
According to documentation released by U.S. authorities in January, Romanian citizen Mihai Ionut Paunescu set up online infrastructure that allowed others to distribute the damaging programs, causing tens of millions of dollars in losses and affecting well over a million computers.
Some 200 computers of the U.S. space agency NASA were affected by the virus between December 2007 and August 2012, the documents revealed.
Paunescu was arrested in Romania in January, but the third accused co-conspirator, Nikita Kuzmin, a Russian national, was arrested in New York on various charges, including bank fraud and bank fraud conspiracy.