The Serbian tennis star was deported from the country last year after attempting to enter without being vaccinated against COVID-19.
He was subsequently given a three-year visa ban but the new Australian government has now overturned it and he will be free to play in Melbourne in early 2023.
Djokovic celebrated the news with a win over Andrey Rublev at the ATP Tour Finals and spoke of his joy at being able to play at his most successful Grand Slam again.
The 21-time major winner said: "I was very happy to receive the news yesterday. It was a relief obviously knowing what I and the people closest to me in my life have been through this year with what happened in Australia and post-Australia.
"I could not receive better news for sure – during this tournament as well.
"Did it affect my game today? I would like to believe it did. Why not? I don’t think it did affect me too much because I’m familiar with what I need to do in order to prepare myself for every match."
Djokovic explained that the decision gives him "clarity" for the off-season as he plots to equal Rafael Nadal's tally of 22 Grand Slams.
He said: "Of course, knowing that I have clarity now, what I do in the off-season, starting the season in Australia, also of course it did relieve some of the pressure me and my team felt. Just giving that clarity makes it great for us.
"Australian Open has been my most successful Grand Slam. I made some of the best memories there. Of course, I want to go back there, I want to play tennis, do what I do best, hopefully have a great Australian summer."