The FTSE 100 airline group said the decision had been made to scrap the permitted maximum total of “relevant non-EU persons” holding its shares after it fell below 40%.
In order to maintain its status as a European-owned airline, the cap on ownership of its shares by non-Europeans at a maximum of 47.5% had been introduced when it hit that level in February last year.
The cap was thought to be necessary as airlines faced a threat of losing their right to fly within the EU after Brexit if they were not mostly owned by investors based in the bloc in the case of a no-deal Brexit.
IAG shares rose 5% at 669.9p on Friday morning.
Analysts at broker Liberum said: “While the share price fell steadily after the previous ban was imposed, it is unclear how much of this was related to the non-EU shareholder cap, and how much reflected cuts to estimates, concerns about Brexit and other fundamental factors.”