Environment minister Oppah Muchinguri-Kashiri had said in July that Zimbabwean police and prosecutors would work to ensure Mr Palmer returned to Zimbabwe to face poaching charges.
But on Monday she told reporters in Harare that Mr Palmer can now safely return to Zimbabwe as a “tourist” because he had not broken the southern African country’s hunting laws.
She said the police and the National Prosecuting Authority had cleared Mr Palmer of wrongdoing.
Mr Palmer was identified as the man who killed Cecil in a bow hunt.
Cecil, a resident of Hwange National park in western Zimbabwe, was well-known to tourists and researchers.