The prohibitory orders issued earlier by District Collectors has been removed, government sources said but did not elaborate.
Hectic parleys were held between Haasan and Muslim groups protesting against the film over an alleged negative depiction of Islam, in the presence of Home Secretary R Rajagopal on Saturday, at the end of which the actor-producer agreed to some cuts, including muting some dialogues.
He had also offered to withdraw a case in the High Court challenging the two-week ban imposed on January 23.
The government had banned the film following protests by Muslim groups. While a single judge had allowed the release, a division bench had later upheld the government's ban.
Chief Minister Jayalalithaa had also recently defended the ban, but said that the government was ready to facilitate talks between the two.
The multi-lingual Rs 100 crore film, originally slated for a January 11 release, has been running smoothly in other states, including Kerala which has a 25 per cent Muslim population, and Andhra and Karnataka.
Its Hindi version "Vishwaroop" hit theatres in North India yesterday, which, according to Haasan, had evoked "fantastic" response.