Earlier this month, parliament said anyone visiting the building with their face covered would have to sit in a separate area of the public gallery.
The move was widely seen as being aimed at Muslim women in burkas or niqabs, prompting discrimination accusations.
Officials said visitors would now have to show their face briefly to security.
“Once this process has taken place, visitors are free to move about the public spaces of the building, including all chamber galleries, with facial coverings in place,” the Department of Parliamentary Services said in a statement.
The plans would have affected Muslim women wearing niqabs, full-length garments where only the eyes are visible, and burkas, where no part of the face can be seen.
Stephen Parry, president of the Senate, said the initial ruling had been made because of rumors that a group of people were planning to attend prime minister’s questions on October 2 wearing veils and stage a protest in the public gallery.
He said the measure was intended to be temporary and, as it had come on the last day of the parliamentary session, had never been enforced.
PM Tony Abbott – who has previously described burkas as a “confronting” item of clothing which he wished people would not wear – had asked Speaker Bronwyn Bishop to “rethink that decision”.
The rule had come amid growing concern about the threat of terror attacks in Australia and the involvement of Australian jihadists in the Islamic State (ISIS) militant group fighting in Iraq and Syria.
Australia has joined the US-led coalition fighting IS in Iraq, and domestically, police have conducted anti-terror raids in recent weeks.
However, critics said that as everyone entering parliament was subject to security checks there was no reason for people with faces covered to be considered a specific threat.
There are about half a million Muslims in Australia, making up just over 2% of the population.
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