The 23-year-old tested positive for sibutramine, a banned stimulant often found in weight-loss pills, after winning gold at the Games in Incheon, South Korea in September and was stripped of her medal and kicked out of Asia's biggest multi-sports event.
Tai faced a two-year ban from the World Anti Doping Agency (WADA) but an appeal, stating she was unaware of the composition of the supplements, proved successful and means she will return on March 20 and not miss any competitions.
Wushu Federation of Malaysia vice-president Chong Kim Fatt said they had been notified by letter of the decision by the International Wushu Federation (IWUF) and were relieved.
"We determined that Cheau Xuen had no intention to conceal having taken the banned substance as she herself was a victim of circumstances," Chong was quoted as saying by the Star Newspaper about their defence.
"She innocently believed that the health supplements and slimming product which she took in good faith did not contain the banned substance as it was not stated in the product description.
"Anyway, we regret that this incident happened and wish to apologise to all parties involved for the inconvenience caused. We accept this decision. This is also a lesson for us to educate everyone to be aware of drugs and banned substances."
The embarrassing incident had led to WFM President Martin Lim stepping down from his role in October.
Tai, though, will be eligible to defend her Nandao title at the biennial Southeast Asian Games in Singapore in June.
"There are no competitions until then. We still have a selection trial but she should have no problem getting into the team as she is a world-class athlete," Chong said.
"We have full confidence that she will continue to be a responsible and disciplined athlete."
(Reporting by Patrick Johnston in Singapore; editing by Sudipto Ganguly)
