Father Dan McCarthy is being restored as pastor emeritus, with residence, at Saint Elizabeth of the Trinity Parish and School.
Late last year, the Catholic priest was accused of abusing a minor while he worked at Angel Guardian Orphanage in Chicago 50 years ago.
The review board found insufficient reason to suspect McCarthy is guilty.
Saint Elizabeth of the Trinity is located on Chicago's Northwest Side.
Father Michael Pfleger, a prominent activist and South Side pastor, was also recently reinstated after being cleared of sex abuse allegations. He said he struggled with isolation, depression, and even suicidal thoughts during the investigation.