Equestrian rider Shane Rose was cleared to compete in Mankini after being vetted.
Equestrian Australia (EA) said the three-time Olympic medalist had not breached its code of conduct.
EA CEO Darren Gaucher said, “Mr. Shane has reflected on this incident and has apologized.''
“He understands the high standards expected of everyone involved in our high performance program.
“Now that the matter has been resolved, Shane and his teammates look forward to continuing to focus on qualifying for the Paris Olympics.”
Costumes are encouraged at the convention, and Rose also wore a gorilla costume and a Simpsons' Duff Man costume. The nature of the “community event'' was taken into account in the study.
EA also believed that Rose had already issued a public apology, posting it on social media and later deleting the post in an effort to de-escalate the issue.
He also took to social media to thank people for the support he received following the incident.
“I am delighted that Equestrian Australia has completed its review and has been cleared to return and continue working towards the Paris Olympics,” Rose said.
“The support and interest in this story was unlike anything I had ever experienced before.
“Now it's time to focus on the job at hand and try to get Australian equestrians in the media for a more positive cause – Olympic gold.”
The governing body added in a statement that it would “work with clubs and stakeholders to assess minimum dress standards for future events” and review the “educational model” for high performance programmes.
Sponsors of the Wallaby Hill event have also pledged to give away a mankini to every spectator at next year's event and donate A$100 to support men's health for every spectator who wears a mankini.
Rose won silver medals in the team all-around at the 2008 and 2020 Olympics, and bronze in 2016.