Spain’s football federation imposed the ban at the end of October, arguing the former France midfielder did not have the right licence to coach in Spain.
Real appealed and the three-time World Footballer of the Year was allowed to continue coaching while the Court of Arbitration for Sport considered the case.
Zidane’s assistant Santiago Sanchez, who was also sanctioned by the Spanish federation, the RFEF, was also cleared to continue his duties while the case was considered.
Real Madrid initially went to the RFEF appeal committee but when that was rejected, the 10-time European champions turned to the Court of Arbitration.
“The appeal was accepted. This annuls the resolution from the appeals committee of the RFEF,” a spokesman for the court of Arbitration for Sport told AFP.
Real insisted that Zidane has the proper qualifications to coach their reserve team, although he needs a UEFA ‘A’ licence level three badge to do so and he only holds a level two.
Spanish coaching school Cenafe complained to the Spanish federation, alleging that Real were using Sanchez’s name on teamsheets as coach to get around regulations preventing Zidane from running the reserve team, Real Madrid Castilla.
But Real said Zidane “has been authorised by the French Football Federation to work as a head coach” for Real Madrid Castilla and its league.
Although Zidane has not completed the full quota of practice hours with the French Football Federation (FFF) to gain promotion to level three, the FFF supported Real’s case, arguing UEFA regulations allow a coach who is being trained to work.
Real Madrid welcomed the court of Arbitration for Sport’s ruling, saying in a statement it would allow Zidane and Sanchez “to carry out their professional activities.”
Zidane, 42, played for Cannes, Bordeaux and Juventus before joining Real Madrid in 2001 and retiring at the age of 34 after the 2006 World Cup.
He spent five seasons with Real as a player after joining from Italian side Juventus in 2001. He scored the winner in the 2002 Champions League final.
Zidane handed his eldest son Enzo, 19, a debut for the Real Madrid reserve team on Sunday.
Real Madrid Castilla were relegated from the second division last season, before Zidane joined the coaching staff in June.
The club have won five and drawn two of their last seven matches.
Zidane enjoys a close relationship with Real Madrid coach Carlo Ancelotti and would also be ideally placed to take over from the Italian when he decides to move on- AFP