Powers returned to Tower Hamlets ahead of schedule
Administrative powers have returned to Tower Hamlets Council for the first time in two years.
Government-appointed commissioners took over some services in December 2014 after a report revealed a "culture of cronyism" at the council.
Councillors will again be able to award grants to not-for-profit organisations and regain procurement oversight, following "significant improvements".
Tower Hamlets Mayor, John Biggs, called the move "a real vote of confidence".
A 2014 review by PricewaterhouseCoopers found a "breakdown in democratic accountability" and significant risk of misuse of public funds under former mayor Lutfur Rahman.
Mr Rahman was found guilty of corrupt and illegal practices and removed from office in April 2015 and was replaced by Labour's Mr Biggs.
A new report by the lead commissioner at the council, Sir Ken Knight, highlighted progress at the council but warned there was still "much more to do".
Three commissioners will remain in charge of specific areas of council work.
Communities Secretary Sajid Javid called the move "a positive step", but warned he would "halt the process if there are any concerns".
Mr Biggs said: "This is a real vote of confidence in the progress we have made turning the council around.
"Grant making was one of the most contentious areas under the previous mayor, it's a real achievement to now have grants back under local control."