Ministry spokeswoman Ragnhild Imerslund said Sheik Mohammed bin Rashid al-Maktoum ordered that Marte Deborah Dalelv, 24, was free to travel and could remain in the United Arab Emirates emirate if she chooses, CNN reported.
The sheik, also the United Arab Emirates vice president, said Dalelv hasn't been and would not be deported, Imerslund said.
"I am very, very pleased to be pardoned," Dalelv told the Norwegian Broadcasting Corp. "I do not know when I'll go home, but as soon as possible."
Dalelv, an interior designer in Qatar, was on a business trip to Dubai earlier this month when she reported to police she was raped by a colleague.
Dalelv was then detained and charged with having unlawful sex, making a false statement and illegal consumption of alcohol. Last week, a court sentenced her to 16 months in prison, drawing outrage from Norway.
Imerslund said foreign ministers of Norway and the United Arab Emirates had a "very constructive dialogue that helped resolve Dalelv's case along with international pressure.
"I am very happy that Marte Dalelv is pardoned and that she is now a free woman," Prime Minister Jens Stoltenberg told NRK. "We have always believed that this verdict is unacceptable."