Sineenat Wongvajirapakdi was stripped of her rank and titles a year ago just three months after she became the consort, accused on national television of "disloyalty" and "ambition" to match the position of Queen Suthida.
"Sineenat Wongvajirapakdi is not tarnished", said a decision by the king published by palace mouthpiece Royal Gazette, confirming she would once again take the honorific title of "Chao Khun Phra", or noble consort.
She has been given back all her royal decorations and military ranks, as if she had never been stripped of them, according to the announcement, dated Aug 28.
Her prominence at the king's elaborate coronation ceremony in May previous year stunned the Thai public.
Vajiralongkorn assumed the throne after the 2016 death of his father, King Bhumibol Adulyadej, who reigned for 70 years.
She was also accused of actively seeking to block the appointment of Vajiralongkorn's wife, Suthida Vajiralongkorn Na Ayudhya, as queen following their marriage in May a year ago in order to take the position for herself.
Then last October, less than three months after making Sineenatra his royal consort, the king issued a command rescinding the appointment.
That statement said the king tried to alleviate the problem by appointing Sineenatra his official royal consort but that she remained unsatisfied and continued to compete with Queen Suthida.
Ms Sineenatra's fall had been particularly shocking because only two months earlier, a palace website released scores of photos of her and the king holding hands, unusually intimate photos for members of the royal family.
Like Queen Suthida, she served in the royal bodyguard unit, reaching the rank of major general. The king suddenly married Suthida Tidjai, a former flight attendant, shortly before his coronation in May 2019.
The announcement comes as Thailand has been roiled by anti-government protests during which demands have also been made for curbs to the 68-year-old king's newly expanded powers - taboo in a nation where conservative tradition upholds the monarch as semi-divine and above criticism.
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