Semenya, 19, has not run competitively since undergoing tests at the Berlin world championships in August.
"I am thrilled to enter the global athletics arena once again and look forward to competing with all the disputes behind me," Semenya said in a statement released by her lawyers.
Athletics South Africa said it was in contact with her coach to find out if Semenya can be included in the country's squad competing in the IAAF world junior championships in Canada later this month.
"ASA (is) in close communication with her coach, Michael Seme, which will see the athlete undergoing fitness evaluation within the next 24 hours, which will determine whether she is considered as an addition to the current 22-member South African team that will compete at the IAAF World Junior Championships...," ASA said in a statement. The International Association of Athletics Federations (IAAF) said it accepted the findings of an expert medical panel.
"The IAAF accepts the conclusion of a panel of medical experts that she can compete with immediate effect," the sport's ruling body said in a statement.
Lawyers acting for Semenya said the decision to allow her to compete came after a
"landmark settlement" between the IAAF and the athlete. Semenya's lawyer Greg Nott said details of the settlement would remain confidential.
"Our direct negotiations with the IAAF representatives, through the mediator, have been ongoing for 10 months," he said. "Meetings have been held in Monaco, Istanbul and Paris, but due to the nature of the matter the parties resolved to keep the negotiations confidential."
Semenya's return to competitive athletics was delayed after her comeback event in Zaragoza, Spain was cancelled in May. ASA had made it clear that Semenya was not banned from competition but said she must wait for the results of her tests from the IAAF.
Semenya sprung to prominence last year with her rapid improvement over 800M. Her winning time in Berlin of one minute 55.45 seconds was the fastest of 2009.