The Football League has accepted an independent QC's decision to allow Massimo Cellino to take over Leeds and given him the green light to become a director at Elland Road.
The league's governing body originally blocked the deal after deeming the Italian businessman to have failed their owners' and directors' test, but that was overturned on appeal on Saturday.
The Football League then considered appealing that ruling, but after a board meeting on Thursday it was decided not to stand in Cellino's way.
A spokesman said: " At its meeting in London today, the board of directors of the Football League considered the outcome of the recent appeal by Massimo Cellino under the owners' and directors' test.
"In making its original decision, the board took the view that Mr Cellino's recent conviction in Sardinia was for an act that 'would reasonably be considered to be dishonest' and that he was therefore subject to a disqualifying condition.
"In the current absence of detailed reasons for the conviction from the Sardinian Court and having taken into account the principles of Italian law, an independent QC reached a different conclusion. On this basis, Massimo Cellino is cleared to be a director of Leeds United."
Cellino's task of transforming the fortunes of Leeds was brought into sharp focus on Tuesday when the club revealed losses of £9.5million for the 2012-13 financial year.
The accounts confirmed the 57-year-old has inherited debts of more than £22million .
Cellino also confirmed he will Brian McDermott until the end of the season before deciding further on his position as manager of the Sky Bet Championship team.