The International Narcotics Control Board (INCB) has dropped Colombia from its list of countries requiring special observation.
It said Colombia remained the world's biggest producer of cocaine but had made progress in its war on drugs.
Board member Camilo Uribe said he hoped the move would encourage Colombia to continue its fight against drugs.
The INCB is a monitoring body for the implementation of the United Nations' international drug control conventions.
Mr Uribe said Colombia had strengthened its state institutions and its justice system, allowing it to control the supply and demand of drugs more effectively.
"This doesn't mean we'll let our guard down," he warned.
He said the INCB would continue to monitor developments in Colombia closely, but had wanted to give the country recognition for its achievements so far.
According to the UN's 2010 World Drug Report, coca cultivation in Colombia decreased by 58% between 2000 and 2009, mainly due to large-scale eradication.
The report estimates that in 2009, Colombia eradicated 168,000 hectares of coca, the leaf from which cocaine is made.
The report also says Colombia has seized more drugs than any other state in the world over the past decade.
Colombian President Juan Manuel Santos welcomed the move and thanked Colombians in the drug-growing regions for their efforts in combating production.
"It's not just the tonnes of cocaine seized by the police, the army or the navy, it's the drastic change [in attitude] which we've seen in these areas," he said.
But the UN figures suggest production has been shifting to other Andean countries, and to Peru in particular, where coca cultivation has increased by 55% over the past decade.
Mr Uribe warned all drug-producing countries that it was "hard to get off the list, but getting on was very easy".