The Commission met in Sydney this week and on Tuesday gave the green light for Cousins to enter either the NAB AFL Draft on November 29, or the pre-season draft on December 16.
But Cousins, and any club that decides to draft him, will have to satisfy a stringent drug testing regime including up to three urine tests per week, and four hair tests per year.
"We had to weigh up the interests of Ben Cousins, the wider football family, the wider community and the integrity of the game," said AFL Commission Chairman Mike Fitzpatrick.
However, Fitzpatrick refused to say whether the decision of the Commission was unanimous.
AFL chief executive Andrew Demetriou said Cousins could only join a club which has a drug and alcohol program which meets the satisfaction of the AFL.
Cousins must also attend any rehabilitation programs or meetings with experts specified by the AFL.
Demetriou said that if Cousins failed to cooperate with the drug testing program set out for him in any way, or returned a positive test, his penalty would be at the absolute discretion of the league's football operations manager or the AFL Commission.
Their power would include the ability to instantly suspend Cousins pending the outcome of an investigation into his alleged offence.
Demetriou admitted there was a risk attached in allowing Cousins back into the game, but said a return to football would be beneficial for the former champion's health.
"He's been battling a difficult illness and of course there is a risk of relapse. Clubs must go in with their eyes wide open ... and Ben Cousins must accept responsibility for himself."
Demetriou added that he hadn't spoken to the game's sponsors about the issue but said, "in fairness, they've always believed in the independence of the AFL Commission's decisions.
"I've got no doubt our sponsors, corporate partners and broadcasters would understand [that] in taking this decision we've gone about it thoroughly and consulted widely and acted on the best medical advice."
St Kilda are considered the frontrunners to recruit Cousins now that he has been cleared to return to the AFL, most likely through next month's pre-season draft.
The Saints have been in regular contact with Cousins in the lead-up to Tuesday's hearing and have publicly declared their interest, although they have yet to make a firm commitment to recruiting him.
The Brisbane Lions have also expressed an interest, although they have not yet met with him, preferring to wait until the AFL made their decision.
The Lions have the advantage if it comes down to a battle for his services between the two clubs, as they have earlier picks in both the national and pre-season drafts.
There is now nothing to prevent another club which has not declared its hand swooping on the former Brownlow medallist in the draft.
The Commission's decision ends the 12-month ban they imposed in November last year, after they found the former West Coast skipper guilty of bringing the game into disrepute.
Cousins has since spoken publicly about his ongoing battle with drug addiction and has undergone rehabilitation and a drug-testing program instigated by the AFL.
The 30-year-old played 238 games for the Eagles from 1996-2007, captaining the club from 2000-05 and winning four club best and fairest awards, as well as the Brownlow Medal in 2005.
He was forced to relinquish the captaincy ahead of the 2006 season, after a pre-season incident in which he fled from a booze bus, but went on to play in the Eagles' premiership side that year.
But he was suspended by the club at the start of the 2007 season to overcome personal issues, later revealed to be drug addiction.
He returned in round 16 and played seven more games with the club, before tearing his hamstring in a qualifying final in what proved to be his final match with the Eagles.
