The Australian Energy Market Operator will begin lifting its suspension from 4am on Thursday, citing a "clear improvement" in conditions since it halted the market a week ago.
Improvements included 4000 megawatts of generation returning to the grid after outages.
"The first step is that at 4am tomorrow, we will allow the market to set the price again," AEMO chief executive Daniel Westerman said on Wednesday.
AEMO expects the system used to schedule generation into the grid will be operating without failure, with a low volume of directions to generators and a reduction in forecast shortfalls of energy as electricity suppliers respond to market signals.
The market operator's second step will be to completely lift the suspension after monitoring conditions for at least 24 hours.
The organisation met with industry on Tuesday outlining what needed to occur to resume normal operation in the national electricity market following the suspension on June 15.
"We have seen nearly 4000MW of generation return to service since this time last week, that means the risk of any shortfall has reduced markedly," Mr Westerman said.
"We know many generators are working hard and closely with governments to improve the confidence of their fuel supply, to ensure that they are able to operate at their desired level of output."
Energy Minister Chris Bowen said the actions had been significant and necessary.
"The Australian people can have confidence in ... the market operator, (which) works closely with state and territory and the federal government to ensure that consumers' best interests are protected and that our energy system remains reliable, despite the very considerable challenges that have been faced in recent weeks," he said.
He reiterated the energy market would require constant management.
"The issues that have led to this have been multi-faceted … we need more transmission, more storage and more generation of electricity," Mr Bowen said.
"Risks remain in the system and I know AEMO remains vigilant about what needs to be cared for in the coming days."
Liberal deputy leader Sussan Ley earlier said the Morrison government had plans in place to make the transition to cleaner energy as smooth as possible.
"At the heart of this problem is not understanding that a transition takes time and a transition uses gas," she told Sky News.
"We did plan for the transition to renewables, we just didn't plan it at a rate that pushed up power prices.
"It's Labor that talks up the acceleration to renewables, which of course takes confidence out of the fossil fuels market. Coal-fired power stations heard those messages from Labor."
The Australian Competition and Consumer Commission has been given additional powers by the federal government to monitor energy pricing.
