He's going back to work as Grimsby's CAO and the town will issue a formal apology.
Harry Schlange was placed on paid administrative leave last week.
Council voted 5-4 in favour of bringing him back last night.
The motion said Mayor Jeff Jordan acted without consulting council.
It also said Schlange was not being investigated and has not been accused of any misconduct.
The Town Clerk will hire a third party investigator, to look into any allegations that may arise from this matter.
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