The young footballer was informed of the decision just hours before he was due to be deported.
Andrew Nagbe, 22, was arrested last month after attending Stockholm Pride, after migration officials told him there was not enough evidence that he is gay.
He was due to be deported on August 23 and sent back to his native Liberia – where it’s illegal to be gay.
“I want to play football and live as an openly gay man in Sweden,” he said following his arrest.
Nagbe said he would be imprisoned, “beaten and raped every day” if he was sent back.
“Everyone I know in Liberia knows I am gay now, so they won’t hold back.”
However, hours before the footballer was due to board his flight back to Liberia, the Swedish Migration Board announced it would be re-opening the case.
The board allegedly changed its mind because they received new documents, as well as the international attention the case has garnered.
“His case has received international attention, including from the BBC, and his sexuality is now even better known in Liberia,” said Stig-Åke Petersson – refugee officer at Swedish LGBT organisation RFSL.
“Since then, the United Nations High Commissioner for Refugees (UNHCR) has been informed about this and gone in with an opinion to Andrew’s advantage.”
Nagbe was said to be “very happy” when he received the news, although his future remains uncertain.
“After all that has happened, I don’t dare to have any idea about it,” Petersson added.
‘But given that they cancelled the trip, the chances increased.’
Nagbe originally came to Sweden on trial with a third-tier Swedish team, Umeå FC. At the time he was arrested, he had been playing for Södertälje FK.
Liberia was recently ravaged by the Ebola virus outbreak, which exacerbated pressure on local LGBT advocacy groups.
The news is especially unusual given Sweden’s positive record on LGBT rights, including offering compensation for trans people who in the past were forced to be sterilised as a “cure”.