The Good Food Chain is no longer part of the investigation into the source of the outbreak which resulted in five hospital patients dying.
While a spokesman for the Staffordshire company, which voluntarily ceased manufacture earlier this month, welcomed the FSA’s decision, he said its deepest sympathies remained with the families of those who have died.
In a statement, the FSA said its investigation would focus on production further up the food chain.
“Our investigations are now focused on where the outbreak strain originated from and subject to strict verification and ongoing monitoring by Stafford Borough Council, the Good Food Chain company is now able to restart production,” said Colin Sullivan, the FSA’s chief operating officer.
"The company will be carefully monitored to ensure public health continues to be protected."
Jonathan Price, cabinet member for environment at Stafford Borough Council, said: "We have worked tirelessly with the Good Food Chain and are reassured that their manufacturing processes, cleaning procedures and environmental standards meet those we expect for producing ready-to-eat foods."
The same strain of listeria was identified in meat produced by North Country Cooked Meats, which was used in some of the sandwiches sold by the Good Food Chain, the FSA added.
Investigators are testing North Country's supply chain and examining historical detections of listeria.
The meat producer voluntarily stopped distributing on June 3 and withdrew all of its ready-to-eat products on a precautionary basis, the FSA said.
Listeria infection is rare and usually causes a mild illness in healthy people.
But it can have more serious consequences among those with pre-existing medical conditions, pregnant women and those with a weak immune system.
The Good Food Chain will have to reapply for accreditation before it can directly supply to the NHS again.
Eight hospitals in seven NHS Trusts have reported cases of listeria linked to pre-packed sandwiches and salads eaten by patients