Carvana would be required to post a $250,000 bond to guarantee payment of any fines or fees incurred by customers that resulted from retailer's failure to follow the law, Illinois Secretary of State spokesman Henry Haupt said.
"We've resumed normal service in the State of Illinois. Carvana delivered all previously purchased vehicles during this recent period as we discussed the situation with the State," a Carvana spokesperson said.
Shares of Carvana rose marginally to $31 in extended trading.
During the stay, Carvana is allowed to sell vehicles to Illinoisans, but cannot issue temporary registration permits or license plates.
It must register titles through Illinois remitters, which are third-party entities licensed in the state to process title transactions, Haupt said.
The announcement comes nearly a week after Carvana's license to sell vehicles in Illinois was suspended over the mishandling of paperwork related to its vehicle sales, according to a state official.
Carvana, best known for its automated car vending machines, laid off about 2,500 employees, or 12% of its workforce earlier this month.
(Reporting by Nathan Gomes in Bengaluru)