It comes after the phone maker successfully challenged the ban in federal court.
The US Defense Department will remove Xiaomi from a list of companies with alleged links to the Chinese military, a court filing revealed Tuesday. Xiaomi was added the list during the final days of the Trump administration in January, though a US federal judge temporarily blocked the move in March.
Companies on the Defense Department's list are blocked from receiving investments from US citizens or organizations. If Xiaomi's designation hadn't been overturned, existing US investors would have had to divest. In the wake of the announcement, shares in the company took a jump of 6.1% in Hong Kong, according to The Wall Street Journal.
"Defendants have agreed that a final order vacating the January 14, 2021 designation of Xiaomi Corporation as a CCMC...would be appropriate," states the joint status report filed Tuesday with the US District Court for the District of Columbia in Xiaomi v. US Department of Defense. A CCMC is a "Communist Chinese military company," according to the Defense Department.
Xiaomi is among the biggest phone makers in the world, sitting alongside Apple, Huawei and Samsung in terms of market share, according to researcher IDC.
Huawei, another Chinese company, has been a subject of US government concern about national security over alleged ties to China's communist government. Huawei is on the Department of Commerce's Entity List, which forbids US companies from trading with it. Huawei has long denied any wrongdoing and continues to maintain its innocence.
Neither Xiaomi nor the Defense Department immediately responded to requests for comment.