BBC Director-General Tony Hall has reviewed and reversed the decision to partially uphold a complaint against presenter Naga Munchetty.
The BBC's Executive Complaints Unit (ECU) had ruled that the BBC Breakfast host breached editorial guidelines when she condemned comments made by Donald Trump after he told female Democrats to "go back" to their own countries.
However, Lord Hall now said in an email to staff: "I don't think Naga's words were sufficient to merit a partial uphold of the complaint (against her) around the comments she made."
He added: "The Executive Complaints Unit ruling has sparked an important debate about racism and its interpretation.
"Racism is racism and the BBC is not impartial on the topic. There was never a finding against Naga for what she said about the President's tweet.
"Many of you asked that I personally review the decision of the ECU. I have done so. I have looked carefully at all the arguments that have been made and assessed all of the materials. I have also examined the complaint itself.
"It was only ever in a limited way that there was found to be a breach of our guidelines. These are often finely balanced and difficult judgements.
"But, in this instance, I don't think Naga's words were sufficient to merit a partial uphold of the complaint around the comments she made.
"There was never any sanction against Naga and I hope this step makes that absolutely clear. She is an exceptional journalist and presenter and I am proud that she works for the BBC.
"I have asked the editorial and leadership teams to discuss how we manage live exchanges on air around these topics in the future. Our impartiality is fundamental to our journalism and is what our audiences expect of us."