According to an NDTV report, The decision to reinstate Hatekar was taken at 3 am last night after a nine-hour meeting by the university's top management.
In a statement, the University said that due to "the wide public demand" and in the interest of the students, Professor Hatekar is being reinstated.
However, the charges against him will not be dropped and the matter will be probed by a former judge.
Professor was suspended as he blamed V-C for University's low academic status.
The Mumbai university Chancellor and Maharashtra Governor met Vice Chancellor Rajan Welukar and reportedly asked him to review the suspension order.
A one-member fact-finding committee appointed by VC Rajan Weluk to probe Hatekar's conduct and the issues raised by him made a presentation to the Management Council yesterday. The Management Council discussed the issue for over 10 hours, the statement said.
It also said the Management Council's decision and VC's action of suspending him under Section 14(4) of Maharashtra Universities Act, earlier this month, was proper.
The Management Council has recommended that retired Judge D G Deshpande head the departmental inquiry against Hatekar. As part of natural justice, Hatekar be called for his version as well, the statement said.
What led to Professor Hatekar's suspension?
On January 4, Professor Hatekar was suspended as he went public against Vice Chancellor Rajan Welukar and blamed him for the down-slide in the university's academic status. The university accused him of "misconduct and moral turpitude."
Dr Hatekar, then, petitioned the Bombay High Court against the "arbitrary and illegal" suspension order.
Hatekar's students launched protest against University's sudden decision to suspend their Professor while alleging that the teacher was punished without being given a chance to defend himself.
Earlier this week, Hatekar took classes on the road outside the university premises.
"When Vice Chancellor Rajan Welukar joined, the university was ranked 96, now it is 150," he had alleged last week.