Sir Keir Starmer has said Diane Abbott is "free to go forward" as a Labour candidate in Hackney.
Today's (May 31) announcement means Ms Abbott can represent the Labour party in the Hackney North and Stoke Newington constituency.
A senior Labour party source clarified that the National Executive Committee, the ruling body of the Labour Party, will not block Ms Abbott from standing.
The committee is due to endorse all Labour nominees next week, ahead of the legally mandated deadline for nominations on June 7.
Ms Abbott had previously said she wanted to represent her Hackney North and Stoke Newington seat for "as long as possible", despite claiming earlier that she was barred from standing.
The party whip was restored to her this week, after it emerged an investigation into her comments about racism experienced by Jewish, Irish, and Traveller communities had concluded in December.
Deputy Labour leader Angela Rayner said yesterday: "I don’t think there’s any reason" why Diane Abbott should not stand."
She added that the debate over Abbott's future was "not a great look" for the Labour Party.
Despite Sir Keir Starmer's repeated public statements that no decision about Ms Abbott had been made, speculation over her political future led to criticism within the party.
Ms Abbott accused Labour of a "cull" of left-leaning party members, after the suspension of former Brighton Kemptown MP Lloyd Russell-Moyle and the decision not to endorse candidate Faiza Shaheen in Chingford and Woodford Green.
In response to such claims, Ms Rayner told the Guardian: "I don’t think it’s a purge."
Labour leader Keir Starmer also denied he was removing the left of the party.
After Diane Abbott claimed she was barred from standing, he said: "No decision has been taken to bar her and you have to remember that she was a trailblazer as an MP, she overcame incredible challenges to achieve what she achieved in her political career.
He added: "She carved out a path for others to come into politics and she did all that whilst also being one of the most abused MPs across all political parties."
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