The unit at Bootham Park hospital in York was shut when the Care Quality Commission (CQC) ordered the entire hospital's closure.
Inspectors concluded it was safe to reopen the unit following a site visit on 7 December.
The Tees, Esk and Wear Valley Trust, which runs the hospital, said it would relocate to a new facility in mid-2016.
Dr Paul Lelliott, deputy chief inspector of hospitals at the CQC, said: "Our registration team has reviewed the evidence from the site visit and additional documentation supplied by the trust, and is satisfied that the required work is complete and that people will now be able to receive safe, high-quality care."
The place of safety unit was closed alongside inpatient and outpatient services after inspectors heavily criticised the 18th century hospital.
Patients were discharged to home care or transferred to hospitals elsewhere in the country. Outpatients were given treatment at alternative facilities in York.
The trust said its long-term aim remained providing a new mental health hospital in York.
In the meantime, it plans to adapt Peppermill Court on Huntingdon Road, a unit for elderly dementia patients, into a 24-bed adult inpatient unit.
The trust said it also planned to move the place of safety unit to Peppermill Court when work was completed.
A unit for people detained under the mental health act, closed by health inspectors in October, has reopened.