Ray Cope was due to leave the village of Lympstone after 17 years with a longer-serving colleague due to replace him.
Residents launched a campaign to retain Mr Cope, saying he had become "part of the village".
Royal Mail has now said "more changes have been made locally" and "Ray will remain on his normal duty".
Posters supporting Mr Cope appeared in the village and several residents wrote to Royal Mail following the decision.
Jennifer and Frederick Mather, who have been taking part in the campaign, said the change is "great news" but they will continue with the online petition.
Ms Mather said: "The great news is that he will be with us for six months at the end of which there will be another review.
"He is so grateful and doesn't know how he can thank the village enough but we will do our best!
"We want Royal Mail to know that we will not give up on wanting Ray to be here for the foreseeable future."
Royal Mail spokesperson Mike Norman said: "We are pleased that our customers in Lympstone have had such excellent service from one of our postmen.
"It is always gratifying when our customers recognise the hard work of their postman or woman. I can confirm that as part of our on-going reviews, more changes have been made locally.
"This means Ray will remain on his normal duty."
Royal Mail has made a U-turn over the future of a Devon postman following a campaign from residents.