The deportation, ordered by Sweden’s previous Social Democratic government, led to strong criticism of Sweden by international human rights’ organizations.
Migration Minister Tobias Billström’s spokesman confirmed on Wednesday afternoon that the decision had been taken at a cabinet meeting on Wednesday lunchtime.
The decision means that Agiza is free to apply to return to Sweden.
The government in March reversed the decision to deport another Egyptian, Mohammed Alzery, who had been deported by the CIA operatives at the same time as Agiza.
Alzery applied for a Swedish residence permit, but the Swedish Migration Board turned down his application last week.