Five viewers complained to the Advertising Standards Authority (ASA) that the Cycling Scotland ad, which was intended to promote cycling safety, was 'irresponsible and harmful'.
It was banned in January on health and safety grounds on the basis that it 'undermined the recommendations set out in the Highway Code'.
However, Cycling Scotland told the ASA that wearing a cycling helmet was not a legal requirement in Scotland, only a personal choice for the individual.
The national cycling body said the positioning of the cyclist complied with the national standard for cycle training.
The ASA admitted there was a 'potential flaw' in its ruling and have now back pedalled and issued a new ruling which does not uphold the complaints, meaning the advert can be shown.
The ASA said: "We acknowledged Cycling Scotland's explanation regarding why the cyclist featured in the final scene of the ad was placed in the primary position and that this was appropriate given the specific road conditions."