The 36-year-old was suspended indefinitely in early March in the wake of an FBI wiretap capturing a phone conversation between Wade and former agent Christian Dawkins discussing an offer for a potential recruit.
Wade met Friday with school and NCAA officials, answering "all questions" and denying "any wrongdoing in connection" to the recruiting scandal.
"Coach Wade's explanations and clarifications offered during the meeting, absent actual evidence of misconduct, satisfy his contractual obligation to LSU," LSU athletics director and vice chancellor Joe Alleva said in the statement.
"Accordingly, I have recommended that coach Wade's suspension be lifted and that he should be allowed to resume his coaching responsibilities. (LSU) president (F. King) Alexander has accepted this recommendation."
Wade expressed regret for not meeting with the school sooner to address the issue. He said LSU was left with no choice but to suspend him without him "denying or explaining the media reports" regarding the scandal and added that he's eager to get back to work.
"I am humbled and grateful to be back at LSU," Wade said in a statement on the team's official site. "I would like to express my appreciation to president F. King Alexander and athletic director Joe Alleva for my reinstatement and I sincerely apologize to the university and our fans for the disruption to the university and the program.
"I promise to devote all my energy into preparing for next season and finishing the job we have started at LSU."
The Tigers are coming off one of their best seasons in years, reaching the Sweet 16 for the first time since 2006 during Wade's suspension, which saw him miss the NCAA Tournament. LSU finished 28-7 overall, including a 16-2 record in SEC play. The school captured its first SEC regular-season title in 10 years. Wade is 43-20 in two seasons at the helm of LSU.