Iraq has largely been starved of international matches on home soil since its 1990 invasion of Kuwait, although the country held a handful of friendlies, including a Feb. 28 match against Saudi Arabia in Basra.
"This is a significant moment in shaping the future of football in Iraq," AFC president Shaikh Salman bin Ebrahim Al Khalifa said in a statement.
"The AFC, and the Asian football family as a whole, have supported this structured return of competitive football to Iraq."
Earlier this month, two AFC Cup (the region's second tier knockout competition) matches involving Iraqi clubs were postponed until next month in the hope of playing them in the country should FIFA lift the ban.
"I was in Basra last month to see the friendly against Saudi Arabia and it was clear that the time had come to lift the restriction on competitive matches -- and I am delighted FIFA agree," Shaikh Salman added.
"I congratulate the Iraqi Football Association and all their stakeholders in working so hard to achieve this positive outcome for the game in their country.
"Football development in Iraq can only be benefited by the ability of Iraqi football lovers to see matches played on their own soil and to become involved in the game at every level."
Iraq will host a friendly tournament also featuring Qatar and Syria in Basra starting on Wednesday.
The AFC Cup matches involving Al Zawraa and Bahraini side Manama Club and Air Force Club's home game against Malkiya of Bahrain could now be played in April, the AFC statement added.
(Reporting by Amlan Chakraborty in New Delhi; Editing by John O'Brien)
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