Pakistan's state-run council of clerics, which advises the government on religious issues, gave its approval Wednesday to the construction of a new temple for minority Hindus, ruling Islamic law allows them a place of worship.
Lal Malhi, a prominent Hindu leader who is also a member of parliament, applauded the ruling.
The decision by the Council of Islamic Ideology comes after the government of Prime Minister Imran Khan abruptly halted construction on the temple in the capital Islamabad in June.
Khan's decision came amid threats from radical Muslims who called construction of the temple a blasphemous act.
Some extremists had vowed to try to stop the temple's construction with force, raising tensions. Khan turned to the council to decide if public money could be used for construction. He had promised 600,000 for the temple's construction.
It was not immediately clear Wednesday whether Khan would follow through with providing the funds in light of the council's ruling.
However, the council's ruling left open the possibility the money could be distributed to the Hindu community to use as it sees fit.