The travel ban on Cyril Almeida of Dawn newspaper had sparked a massive criticism of the government and the military from media houses, journalist associations and civil society.
Almedia's name was put on the Exit Control List this week after he reported about a verbal clash between the military and the government over the spy agency's support to militants.
"All concerned are requested to take immediate action in the matter," it said.
The decision was taken after Interior minister Nisar Ali Khan met media representative bodies - All Pakistan Newspapers Society (APNS) and the Council of Pakistan Newspaper Editors (CPNE) - in Islamabad after government came under criticism over its decision to impose the travel ban on Almeida.
"Reiterating full support to freedom of press and independence of media and as a good-will gesture, the Interior Minister today ordered removal of the name of journalist from Exit Control List who had filed inaccurate and fabricated news item about national security meeting," the ministry said in a statement.
He said unverified and speculative news items citing unnamed sources on national security issues must be refrained, that crosses ethical boundaries of responsible journalism.
Minister for Information Pervaiz Rashid, who also attended the meeting, said the government firmly believes in freedom of press and has proved time and again that it cannot compromise on the matter.
Government has initiated a probe to determine who leaked the details of the meeting. Interior Minister Khan said those responsible for the 'news leak' to the media will be punished.
Dawn has maintained that its story was correct and it had "duly verified" the information before its publication.
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