More than 4,000 people from the area surrounding Puyehue Volcano were allowed to return to their homes Sunday after being displaced by Chilean authorities, La Tercera reported.
The Chilean government made its decision after reports showed that the volcanic activity had eased.
The border pass between Chile and Argentina at Cardenal Samore will remain closed for the time being, authorities said.
The volcano, which is about 540 miles south of Santiago, erupted June 4, releasing plumes of smoke that disrupted air travel as far away as Australia and New Zealand.
Chile is located on an arc fault lines prone to frequent earthquakes and volcanic eruptions.