Google has been granted an internet content provider licence in China.
The company confirmed the licence renewal on its blog. There had been fears that Chinese authorities would block the renewal following the country's much-publicised row over censorship.
"We are very pleased that the government has renewed our ICP licence and we look forward to continuing to provide web search and local products to our users in China," Google said in a statement.
Google stunned markets and consumers in January when it warned it might quit the country, saying it would not provide the censored search results that China requires. In March, it began to redirect visitors on its local website to a site in Hong Kong that provided uncensored results.
China's Ministry of Industry and Information Technology said on Wednesday that it was reviewing Google's license renewal application but gave no deadline for completion.
Google's stock has slid more than 26 per cent this year, hit partly by fears that its stance against censorship will incense a Chinese government intent on maintaining control over the flow of information within its borders.
By contrast, local search leader Baidu has seen its stock soar about 75 per cent since Google's announcement on investor hopes for a big market share gain.
An outright licence rejection - as expected by some analysts - would have spelled future trouble for Google's non-search businesses in China, such as Android-based mobile phones, now carried by the nation's largest telecoms carriers.
Google's search business in China accounts for a tiny slice of the company's $24 billion in annual revenue. Analyst estimates of Google's annual revenue in China range from $300 million to $600 million, but long-term growth prospects are key.
Google now operates a landing page for its Google.cn website and clicking anywhere on the page brings the user to the Google.com.hk site. Last week, Google said it would stop automatically rerouting users to its uncensored Hong Kong search site after Beijing indicated it would not renew Google's Internet Content Provider licence if it continued to do so.
Google is due to report its second-quarter financial results next week. Shares in the company ended yesterday up 1.4 per cent at $456.56 and were little changed after-hours.
Additional reporting: Reuters