Some Russian media cast the move as a capitulation, but communications watchdog Roskomnadzor said it had acted because the app's Russian founder, Pavel Durov, was prepared to cooperate in combating terrorism and extremism on the platform.
"Roskomnadzor is dropping its demands to restrict access to Telegram messenger in agreement with Russia's general prosecutor's office," it said in a statement.
Durov has been at odds with Russia's authorities over user privacy issues, with Roskomnadzor demanding that Telegram hand over certain information for it to be included on a government list of information distributors.
Roskomnadzor moved to ban the app in April 2018, but despite blocking IP addresses, it was unable to carry out its threat, with Telegram continuing to thrive in Russia, where it is a leading service for news channels.
Despite the ban on using the app, government departments such as the Russian Foreign Ministry and national coronavirus task-force have official channels on Telegram.
The Kremlin took note of Roskomnadzor's decision and the reasoning for it, the TASS news agency reported, citing Kremlin spokesman Dmitry Peskov.There was no immediate reaction from Telegram or Durov.