By LESEGO MOTSHEGWA and GERALD IMRAY, Associated Press
The 19-year-old South African was sidelined for 11 months after undergoing gender tests following her 800-meter victory at the world championships last August.
The International Association of Athletics Federations said Tuesday it accepts the conclusion of a panel of medical experts that she can compete with "immediate effect."
The statement adds that medical details of her case remain confidential and the IAAF will have no further comment on the matter.
Semenya father, Jacob, told The Associated Press that he had spoken to the 19-year-old runner on Tuesday morning and she was happy.
"She told me she doesn't have any problems, and she is happy," Jacob said.
The announcement brings to an end an 11-month saga involving the teenage athlete, who burst onto the world scene in Berlin where she dominated the 800 final as an 18-year-old to win gold in her first major event.
However, her dramatic improvement in times and muscular build led the IAAF to order the gender verification tests.
Semenya was welcomed as a national hero in South Africa following her stunning victory but reports of the gender tests and stories in the Australian media saying Semenya had both male and female sex organs caused outrage in her home country and led some public officials to rally behind her.
The runner could return to competition at the world junior championships in Moncton, New Brunswick, starting on July 19. However, her coach Michael Seme has said she was not race fit.
Caption: In this photo taken Thursday, May 27, 2010, South African runner Caster Semenya smile during a training session with young Ivorian athletes in Abidjan, Ivory Coast. Semenya's father said Tuesday July 6 2010, that she has told him she is going to be cleared to return to athletics. AP Photo