Mukhtaran Mai, who was gang raped on the orders of a traditional village council in 2002, had demanded that the government allow her to travel after a court ordered the release of 12 men connected with her case.
The US State Department called the travel restrictions outrageous following the order to release the men, some of whom were accused of raping her, and it said she was welcome to visit the United States.
"On the instruction of Prime Minister Shaukat Aziz, the name of Mukhtaran Mai has been removed from the ECL," Interior Minister Aftab Ahmed Khan Sharpao told parliament, referring to an exit control list that prevents overseas travel.
"She is free to go anywhere. She can go wherever she wants," he said.
Islamabad's handling of Mukhtaran Mai's case earlier drew international condemnation, culminating in criticism from US Assistant Secretary of State for South Asian affairs Christina Rocca late on Tuesday.
Pakistani officials on Wednesday said Prime Minister Shaukat Aziz spoke to Mai late on Tuesday by telephone, hours after she demanded her removal from the country's so-called exit control list and said she was being held under virtual house arrest.
The government has meanwhile unveiled a plan to set up an 11-million-rupee ($190,000) centre for women in distress at Meerwala, the town where Mai was repeatedly raped in 2002 on the orders of tribal jury, an official said.
She was raped for more than an hour on the orders of the Meerwala town council as punishment for her brother's alleged affair with a woman of a powerful rival clan.
Mai also claimed that she was physically assaulted by a member of the Pakistani police when she reported the incident, but refused to comment further.
A senior Pakistani official earlier said the prime minister had asked for a report on why Mai's name was placed on the exit control list.
"She is free to go anywhere. She can go wherever she
Aftab Ahmed Khan Sharpao
Pakistani interior minister
Mai, 33, defied local customs to testify and in August 2002 six suspects were sentenced to death. But this March, another court overturned five of the convictions and reduced the death sentence of the sixth to life in prison.
Twelve men were then rearrested on the prime minister's orders but were freed last week, and it subsequently emerged that Mai had been banned from leaving Pakistan.
At a press conference held on Tuesday alongside a government adviser, Mai said she had cancelled her plans to travel to the US at the invitation of human rights group Amnesty International because of her mother's illness.
However Pakistani human rights groups allege she has been forced to cancel the plans because of the government, and in Washington, US official Rocca also waded in to the controversy.
"We're dismayed at the treatment being meted out to a courageous woman, who is herself a victim of a horrendous crime and is being denied her right to travel and to tell her story," said Rocca, who visited Pakistan last month.
Testifying in Congress, Rocca said the US embassy in Islamabad had been in touch with Mai's friends but had been unable to make contact with her directly so far.
US official Rocca (R) strongly
criticised Pakistan's ban on Mai
"We will pursue this matter during the course of the day," she said, adding that "human rights in Pakistan is, of course, a critical component to its ultimate success".
A US embassy spokesman in Islamabad said Mai had requested the withdrawal of a visa application to visit the US, but was unable to say whether the mission had been able to make contact with her.
Mai's lawyer, Aitzaz Ahsan, who is also an opposition member of parliament, said Mai was being kept "hostage" by the government at an undisclosed location in Islamabad.
"She is being kept hostage and she has not been allowed to meet me. I have raised this in the parliament today and I have demanded her immediate release. It is important that she meets me because I am her lawyer," he said.