Yes, AD can be easily used as an Identity Provider for Single Sign on purpose.
If you're going for it, achieving Web single sign on (SSO) through Microsoft's AD FS (Active Directory Federation Services) would be a good choice.
I'll quote the overview from MSDN Article on Active Directory Federation Services:
Overview
AD FS is a standards-based service that allows the secure sharing of
identity information between trusted business partners (known as a
federation) across an extranet. When a user needs to access a Web
application from one of its federation partners, the user's own
organization is responsible for authenticating the user and providing
identity information in the form of "claims" to the partner that hosts
the Web application. The hosting partner uses its trust policy to map
the incoming claims to claims that are understood by its Web
application, which uses the claims to make authorization decisions.
AD FS is Microsoft's implementation of the WS-Federation Passive
Requestor Profile protocol (passive indicates that the client
requirements are just a cookie- and JavaScript-enabled Web browser).
AD FS implements the standards based WS-Federation protocol and
Security Assertion Markup Language (SAML).
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