The woman, an Australian citizen and the last of the so-called "ISIS brides", has been stranded with her disabled daughter in Syria's Al Roj refugee camp and has been trying to leave the country.
She was previously barred from entering Australia because the government believed she posed a significant security risk, but her temporary exclusion order has been lifted in a move branded "disgraceful" by the federal opposition.
The government could not legally block her return if she requested a permit, despite the exclusion order, Home Affairs Minister Tony Burke said.
"The temporary exclusion order applies until a permit is issued, and when a permit is requested, a permit lawfully has to be issued," he told ABC Radio on Thursday.
The exclusion order system was introduced under the former coalition government in 2019 and specifies that return permits must be issued when requested, but allows the government to impose conditions on the individual in Australia.
The woman is part of a larger group who travelled to Syria during the rise of Islamic State and returned to Australia earlier in 2026, with some facing charges regarding crimes against humanity.
Advocates for the cohort say some were coerced into travelling but others went knowingly into the terrorism hot zone.
In February, Mr Burke imposed an exclusion order of up to two years on the final woman in the cohort, who left her home in western Sydney in 2015 and travelled to Syria.
The government will monitor where the woman lives, works, studies and travels, and she will need to give 24 hours' notice before using any telecommunications device or logging on to social media.
"There will be a very high level of scrutiny and surveillance and we have gone absolutely to the legal limit that we're able to," Mr Burke said.
ASIO boss Mike Burgess confirmed his agency was involved in approving the woman's return and said he was satisfied authorities were prepared.
"The full use of my organisation's capability and powers will be used when this individual returns to this country," he told ABC Radio.
"When there are Australians who have been overseas in places like Syria and Iraq who represent security concerns, we assess them, we know the level of risk, and anyone who's considered a high or medium risk gets my agency's full attention."
The government's decision to allow the woman back to Australia was farcical and disgraceful, Opposition Leader Angus Taylor told parliament.
"The Albanese government said it couldn't do anything. What a lot of codswallop. It chose to do nothing," he said.
"Worse, it flung open the door and rolled out the red carpet."
But Save the Children, which has long advocated for the group of women and children, said it was good news the pair were returning home.
"This little girl was among the most vulnerable in the group, making her safe and immediate return to Australia a matter of urgency to allow her to access health care and wraparound supports to recover and reintegrate into the Australian community," chief executive Mat Tinkler said.
One young Australian man who was separated from his family as a child was still trapped in the region, he said.
Opposition defence spokesman James Paterson said the government had failed at every turn to manage the issue and protect the Australian community.
"The bottom line is the Albanese Labor government has issued a return permit to a member of ISIS, an affiliate of ISIS, to return to our country, who was previously blocked from returning to our country," he told Sky News.