The Swedish Academy will be allowed to give out the 2018 and 2019 Nobel Prizes for literature this year, the Nobel Foundation said in a press release.
"The Nobel Prize in Literature will once again be awarded and in the autumn, the Laureates will be appointed for both 2018 and 2019," said the statement.
Last year, the Nobel Foundation stopped the Swedish Academy from handing out the award after a string of sexual misconduct allegations against the husband of one of its board members threw the institution into crisis mode.
Jean-Claude Arnault, a French photographer married to poet Katarina Frostenson who ran a cultural foundation that received Academy funds, was jailed last year after a rape conviction. He was also accused of leaking names of literature prize winners,
Frostenson left the academy in January after she was found guilty of leaking the names of prize winners.
Arnault appealed his rape conviction to Sweden's supreme court and denied leaking names.
The scandal first emerged in 2017 and since then several members resigned in protest.
The body's former permanent secretary Sara Danius resigned because of the scandal.
Lars Heikensten, head of the Nobel Foundation, threatened last year to strip the academy of awarding the prestigious prize.
But in a push to restore balance and public confidence, the academy has appointed several new members and set up a new prize committee, said the Nobel Foundation.
"The Academy's regulations have changed and made it possible for members to resign. The Academy also does not include any longer members who are subject to criminal or criminal investigations."