Five viewers complained to the Advertising Standards Authority (ASA) that the ad was "irresponsible and harmful" and it was banned earlier this week on health and safety grounds on the basis that it "undermined the recommendations set out in the Highway Code".
Cycling Scotland told the ASA that wearing a cycling helmet was not a legal requirement in Scotland but a personal choice for the individual - a fact it considered was reflected in the ad with footage of various cyclists with and without helmets.
The aim of the ad is to encourage drivers to give cyclists the same space and care on the road as they would give a horse and Cycling Scotland said the positioning of the cyclist complied with the national standard for cycle training.
It told the ASA the shoot for the advert was supervised by one of its most experienced cycling instructors.
A statement from the ASA said there was a "potential flaw" in its ruling and the ban has been lifted while an independent review is carried out.
The statement said: "The ASA has withdrawn its formal ruling against a Cycling Scotland ad pending the outcome of an independent review.
"That followed a request from Cycling Scotland, in which it argued that the ASA's criticism of the positioning of the cyclist was incorrect. The decision to withdraw was made by the ASA chief executive in light of a potential flaw in our ruling.
"Once the independent review process is complete we will publish our decision on our website."
Cycling Scotland welcomed the decision.
The ad says in a voiceover: ''Not a lot of people know this, but you should treat a cyclist the way you treat a horse ... slow down, treat them with care and give them their space on the road.''
In its response to the initial ban, Cycling Scotland referred to its helmet policy, which discussed the possible undesired outcomes of wearing helmets, including limiting uptake of cycling and ''influencing a driver's behaviour to be less careful when interacting on the road''.
In relation to the cyclist's position on the road, Cycling Scotland said that given the width of the road in the advert, the cyclist was safer riding out past the parking area to be clearly visible to other road users.
The ASA acknowledged the ad was primarily aiming to encourage motorists to take care when driving near cyclists.
Ian Aitken, chief executive of Cycling Scotland, said he was pleased with the ASA decision to review its initial decision.
He said: "It is important to highlight the key message of the advert, which reinforces the need for drivers to give those travelling by bike the correct amount of road space when overtaking.
"The advert was produced in close consultation with an experienced cycle training instructor. The road positioning of the woman travelling by bike in the closing scene of the advert is in keeping with the national standard for cycle training, which is referenced in the Highway Code.
"The driver of the car in the advert also follows the Highway Code, which states that vulnerable road users, such as those on a bicycle, should be given at least as much space as you would give a car when overtaking.
"There is a broad spectrum of research and opinion across the road safety and health communities when it comes to issues relating to helmet use and the ad reflected this diversity by showing cyclists both with and without helmets.
"Cycling Scotland will pursue the independent review process and hope it results in the ASA Council being asked to fully reconsider its adjudication."