The Rocket Club had its licence suspended following an urgent licence review hearing last month called for by West Midlands Police.
A police account to the council said the force received a call on September 26, stating a member of the public had just been raped.
The force stated “up to” four males had “been involved” in the incident.
The interim suspension has now been overturned following a challenge from law firm Harrison Clark Rickerbys on behalf of the venue.
A licensing meeting was held on Tuesday, with evidence heard in private due to legal reasons.
The Birmingham City Council licensing sub-committee consisted of chair Councillor Diane Donaldson, Councillor Mike Sharpe and Councillor Bob Beauchamp.
The councillors decided to remove the interim suspension put in place pending a full review hearing of the venue.
Councillor Donaldson said: “I would like to inform you that we have reached a decision and the decision is as follows – to lift the suspension […].
“The written decision will be with you and will outline the full reasons and that will be with you within 48 hours of the application being made.”
The sub-committee at the previous meeting consisted of chair Councillor Nicky Brennan, Councillor Mary Locke and Councillor Diane Donaldson.
Police have arrested one man on suspicion of rape who is currently on police bail. Police have said the inquiry is still ongoing and no one else has been arrested.