Google has revealed the Chinese government has renewed its Internet Content Provider (ICP) licence.
"We are very pleased that the government has renewed our ICP licence and we look forward to continuing to provide web search and local products to our users in China," Google said in a blog.
Chinese authorities informed Google of the decision Friday, Google spokeswoman Jessica Powell said. She offered no further comment.
China's Ministry of Industry and Information Technology, which reviewed the licence, could not immediately be reached for comment.
The renewal is good news for Chinese internet users, said Liu Ning, a principal analyst at technology consultancy BDA.
"I think Google is important to China's search engine market," he said
If Google were to leave mainland China, search engine rival Baidu would dominate the market, Liu said. "I don't think this would be a good market landscape for Chinese users and advertisers."
"Google still has many loyal users in China," he said.
Google has been waiting to hear back from Chinese authorities about its ICP licence since the company filed for its renewal last week.
The company's licence must be reviewed annually. Its renewal will allow the search giant to continue operating its China-based site, Google.cn.
If Google had been unable to renew its license, it could have meant the end of the company's operations in China.
In March, Google began automatically redirecting internet traffic from its Chinese site to its site in Hong Kong, which provides uncensored search results. The move angered Chinese officials, and has threatened to derail the renewal of the company's operating licence.
Last week Google began making efforts to win over Chinese officials. Rather than automatically redirect Google.cn visitors to Google's Hong Kong search engine, the company now sends visitors to a 'landing page' where they can choose to click on a link leading to the Hong Kong site.
The delay in renewing Google's licence - it was due at the start of the month - was because the company's submission "came late", a spokesman for the Ministry of Industry and Information Technology said earlier this week.
Google's CEO Eric Schmidt said he was confident that Google would get its licence renewed, according to media reports of remarks he made this week at an event in the US.