Father Paul Guzman serves at Most Holy Redeemer Parish in the south suburbs.
The Archdiocese Independent Review Board, its Office of Child Abuse Investigation and Review, and outside investigators found "insufficient reason to suspect Father Guzman was guilty" of the sexual abuse allegation, church officials said Tuesday.
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The Archdiocese of Chicago sent a letter to Most Holy Redeemer parishioners Tuesday, informing them Guzman was cleared.
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In the letter, Cardinal Blase Cupich, archbishop of Chicago, wrote that he accepted the investigation findings and will reinstate Father Guzman, "effective immediately."
When the investigation was ongoing, Cupich asked Guzman to step aside from ministry and live away from the parish, and Guzman agreed.
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The Archdiocese of Chicago closed the letter by thanking parishioners and Guzman for their patience during the investigation.
"Fr. Guzman is convinced of the need for us as a Church to keep our word that the safety of children remains our priority," Cupich wrote. "At the same time, we must keep our commitment to do everything possible to restore Fr. Guzman's good name."