UEFA announced that the European ban imposed on the Spanish club following financial irregularities has been lifted.
Malaga, on the Costa del Sol, had been given a one-year ban by UEFA due to financial irregularities but appealed successfully to the Court of Arbitration for Sport (CAS).
In December, UEFA's financial control body ruled that Qatar-owned Malaga would be excluded from participating in the next UEFA club competition they qualified for - during the next four seasons - because of unpaid bills.
They were also fined 300,000 euros and threatened with a further year ban unless they settled outstanding payments to other teams, staff and tax authorities.
UEFA made their decision after a meeting of the Club Financial Control Body (CFCB) in Nyon to discuss sanctions handed out to eight clubs because of overdue payments.
Malaga, along with Croatian clubs Hadjuk Split and NK Osijek, as well as Dynamo Bucharest of Romania and Serbian teams FK Partizan and FK Vojvodina all had their suspended sanctions lifted having fulfilled conditions imposed by the CFCB.
But there was no reprieve for Romanian club Rapid Bucharest who have been excluded from competing in the next UEFA competition they qualified for during the next three seasons.
The original punishment meted out to Malaga, who are well-placed to qualify for the Europa league with two games remaining this season, was seen as proof that UEFA remain serious about enforcing its Financial Fair Play rules that are being phased in to curb overspending.