This was confirmed today by the International Association of Athletics Federations (IAAF).
The IAAF has given the 19-year-old South African 800m world champion the green light to run again after reviewing the results of gender-verification tests.
"The process initiated in 2009 in the case of Caster Semenya has now been completed," the IAAF said in a statement.
"The IAAF accepts the conclusion of a panel of medical experts that she can compete with immediate effect."
The IAAF added: "The medical details of the case remain confidential and the IAAF will make no further comment on the matter."
Semenya, whose muscular physique and deep voice drew questions about her gender, is excited about her return to women’s track.
“I am thrilled to enter the global athletics arena once again and look forward to competing with all the disputes behind me,” she said in a statement released by her lawyers.
Her lawyer Greg Nott said the settlement resulted from protracted negotiations between medical teams of the IAAF and Semenya’s own team, presided over by an international mediator.
Terms of the agreement will remain confidential, he said.
Semenya has not run since leaked test results said she was a hermaphrodite following her win at the world championships in Berlin in August, 2009.
The incident sparked anger from the South African public and government, who have rallied behind the athlete.
The furore over Semenya’s sexuality first erupted after she lowered her personal best in the 800 metres by more than four seconds at the African Junior Championships, weeks before the 2009 worlds.
She went on to lower her personal best to 1:55.45 in Berlin.
Semenya could be competing again as early as the World Junior Championships in Canada from July 19 and October’s Commonwealth Games in Delhi.
CALL TO FAMILY FIRST
Earlier today, Caster Semenya gave her father a heads-up that she was going to be given an all-clear to return to athletics.
Jacob Semenya said he had spoken to his 19-year-old daughter about the IAAF decision. He said: “She told me she doesn’t have any problems and she is happy”.