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Brixton Academy can reopen once it has met 77 "extensive and robust" conditions "designed to promote public safety", Lambeth Council Licensing sub-committee ruled.
The Academy's premises licence was suspended last December after two people were killed when fans without tickets tried to force their way in.
The council held a two-day licencing hearing on whether the academy should be allowed to host events again.
The BBC reported that the venue's owner said a timeline for when it will reopen would be announced. The 77 conditions to be met by the venue include stronger doors, new crowd management systems, more detailed risk assessments, a new ticketing system, a centralised control and command centre and new security and management.
The council's cabinet member for safer communities, Mahamed Hashi, said the measures had been "proposed by (owners) AMG (Academy Music Group) at the hearing to support their aim of regaining the venue's licence so it can reopen, and making sure we never see a tragedy again like the one there in December 2022".
He added that the local authority would continue to support the ongoing police investigation into the incident.
In a statement, AMG said it was "immensely grateful" to Lambeth Council for its decision and that the academy would reopen with a series of test events.
The Met Police said it would work with AMG and the council to ensure "safety is paramount".
Supt Gabriel Cameron said it had always been the Met's aim that the academy was "run by a licensee who will take all necessary steps to ensure [safety]".
Gerald Gouriet KC acted for the Metropolitan Police, Horatio Waller acted for the Licensing Authority (acting as a responsible authority) and Gary Grant was the Legal Advisor to the sub-committee. Philip Kolvin KC represented Academy Music Group at the O2 Academy Brixton Licensing hearing.