The four-time African champions had been sanctioned by the world football governing body for using illegal kit in their African Cup of Nations quarter-final tie against Nigeria.
FIFA president Sepp Blatter proposed to its congress that the penalty be scrapped by “an act of grace.”
With Cameroon getting the unanimous backing of the Confederation of African Football at their extraordinary general assembly on 19 May, the punishment was revoked by FIFA’s centennial congress on Friday.
However, the financial penalty of $155,000 remains in place.
“I am extremely happy that this decision has been reversed,” Fecafoot president Iya Mohammed told BBC Sport from Paris.
“(FIFA president) Blatter requested that the FIFA general assembly give him special powers to grant the pardon and we are happy that they were in support of it.
“We had previously made a powerful case to Caf’s general assembly and we are grateful that they supported our cause.”
Mohammed admitted that the entire episode had been a trying period for Fecafoot and said they never intended to defy the sport’s ultimate authority.
“There have been a lot of misunderstandings between us and FIFA. We never wanted to go against the regulations,” Mohammed insisted.
“But I must admit that there has been some naivety over the way we have handled the affair which must not be repeated in future.”
Cameroon - the only African nation to have made five appearances at the World Cup finals - will compete against Egypt, the Ivory Coast, Libya, Sudan and Benin for Group Three’s sole ticket to the 2006 World Cup finals in Germany. (BBC).
