Lawyers acting for Daniel Love say common sense has prevailed after the Kamilaroi man - who was born in PNG - was released on Thursday after almost two months in immigration detention in Brisbane.
The Department of Home Affairs has also reinstated his permanent residency visa.
“This is the right decision and one that is welcomed by Daniel and his family,” Mr Love's lawyer Rod Hodgson said.
“As we have maintained throughout this case, Daniel should never have been placed into immigration detention – he is an Aboriginal Australian with a proud family history and it is a great relief that the Department have now also taken the sensible step of releasing him from detention.
“We welcome this move, and continue to urge for clarity in these cases – it is essential that people who are clearly part of the Australian community are protected from application of the legal powers available to the Department, in appropriate cases, to remove people from Australia."
The father-of-five was born in PNG in 1979, and has been living in Australia since he was five.
However despite having an Aboriginal Australian father, his parents didn't complete the necessary paperwork to make him an Australian citizen. His mother is from PNG.
Mr Love, 39, was due to start parole after being sentenced to 12 months in prison for assault occasioning bodily harm, when a delegate of the Minister for Home Affairs Peter Dutton cancelled his permanent residency visa due to his criminal record.
His lawyers had appealed for ministerial intervention and sought to challenge his deportation in the High Court.
The development comes as Buzzfeed published an investigation which claimed that an Aboriginal man in New South Wales recently spent seven months in immigration detention facing possible deportation to New Zealand. One advocate told the website that “probably a month doesn’t go by” that he doesn’t come across an Indigenous person in immigration detention.