However, the agricultural firm that developed the strain - Bayer Crop Sciences - said it has no plans to commercialize the genetically engineered LLRICE601.
On Friday the USDA announced that a "thorough review" of scientific evidence led it to conclude that the rice is "as safe as its traditionally bred counterparts".
The deregulation, or regulatory approval, comes after the rice variety was revealed to have contaminated commercial long-grain rice in July this year.
But although the USDA announced in August that a scientific review of available data revealed no human health, food safety or environmental concerns were associated with this rice, the GM contamination sparked a flow of reactions against Bayer and the US rice export market.
The European Commission adopted a decision requiring imports of long grain rice from the US to be certified as free from the unauthorised strain. The Food safety Authority of Ireland implemented a ban on uncertified US long grain rice products, and the UK's Food Standard's Agency also put into effect tough measures to ensure that the UK's food chain remained free from unauthorised GMOs.
Such limits on rice imports had an immediate impact on US farmers. Attorneys for some rice farmers sued Bayer CropScience, alleging its GM rice has contaminated the crop.
In September, Bayer petitioned the USDA to approve the variety, and the petition was open for public comment until October 10.
LLRICE601 is one of a number of GM rice lines developed by Bayer. Marketed under the brand name LibertyLink, these were engineered to tolerate the herbicide glufosinate ammonium. They include two lines of genetically engineered (GE) rice with the same herbicide-tolerant protein, which were approved in 1999.
The USDA now says it is extending its deregulation from the original two lines to include LLRICE601, adding that "this protein has been scientifically reviewed and approved for use in a dozen countries around the world".
In a statement last week, Bayer said it had submitted the variety for deregulation as part of the company's on-going cooperation with USDA after traces of the herbicide-tolerant rice were found at very low levels in samples of commercial long-grain rice. The company said it does not intend to commercialize LLRICE601.