The statement said that disciplinary action against Sasikala has also been withdrawn by the AIADMK.
Earlier, Jayalalithaa had suspended Sasikala and 20 members of her family from the party. Reports reveal that the step was taken by the Chief Minister fearing Sasikala's growing influence in the party.
Sasikala has been a close aide of Jayalalithaa for over 3 decades. She was also a co-accused in the disproportionate assets case that was levelled against Jayalalithaa.
Reports reveal that Sasikala had written an apology letter to the Chief Minister accepting that her relatives had misused power.
"Not even in my wildest dreams, I have thought of betraying 'akka'. For 24 years, I have been living under the same roof. I have no ambitions either in the party or the government. I have always devoted my life to 'akka' and the rest of my life will be to serve her," read her letter.
"Only after coming out of Poes Garden, I became aware of the machinations of my relatives who have misused my proximity and brought disrepute to akka and the party. I have no role whatsoever in that. Hereafter, any relative, whosoever it might be, who had conspired against akka, will remain a persona non-grata for me as well," it said.