Algerian medal contender Taoufik Makhloufi was Monday cleared to run in the Olympic 1500m final after he was earlier thrown out of the Olympics for not trying hard enough in his 800m heat.
Makhloufi, who had already qualified for Tuesday's 1500m final by winning his semi-final, ran in heat five of the first round of the 800m on Monday morning but failed to finish.
An earlier IAAF statement said "the referee considered that he had not provided a bona fide effort and decided to exclude him from participation in all further events in the competition."
But Olympic organisers later released an official communication confirming the disqualification had been revoked.
"After reviewing evidence provided by a LOCOG (Games organisers) medical officer, the disqualification of athlete 1008 (Taoufik Makhloufi) from further participation in the athletics competition of the 2012 Olympic Games has been revoked by the IAAF technical delegates. Consequently, Mr Makhloufi is able to compete," it said.
Makhloufi, 24, qualified for Tuesday's men's 1500m final when he won his semi-final in commanding fashion on Sunday evening in 3min 42.24sec, beating defending Olympic champion Asbel Kiprop of Kenya into second place.
He started his 800m heat on Monday morning but immediately fell to the back of the pack and dropped out after less than 150m.
An IAAF spokeswoman earlier told AFP that the athlete could be reinstated with a medical certificate from a local doctor explaining he had an ailment that troubled him but which could clear up and allow him to compete in coming days.
The spokeswoman told AFP that the report could not come from the team doctor as it would have to be independent.
It came after eight badminton players were disqualified from the Olympics last week after a scandal over "throwing" matches.
Kuwaiti athlete Mohammad Al-Azemi was disqualified from the same 800m event on Monday for obstruction. Al-Azemi crossed the finishing line in third place in heat one.
Polish runner Marcin Lewandowski will go through to the next round "considering that he was pushed by Al-Azemi and lost his pace," another statement said.