The Bahrain Grand Prix will return to the Formula 1 calendar on 30 October.
The race, originally due to be held on 13 March, was called off in February because of pro-democracy protests in which more than 20 people have died.
The Indian Grand Prix, which originally was due to be held on 30 October, will now be held in December.
"This is welcome news for all of Bahrain," said Zayed Rashid Alzayani, chairman of the Bahrain International Circuit, which will host the race.
"As a country we have faced a difficult time, but stability has returned, with businesses operating close to normal and countries removing travel restrictions.
"By the time the grand prix arrives we will be able to remind the world about Bahrain at its best.
"The Bahrain Grand Prix has always been a source of national pride and it is an event than transcends politics."
The sport's governing body, the FIA, said that the unanimous decision, made at a meeting of its World Motor Sport Council, "reflects the spirit of reconciliation in Bahrain".
A state of emergency in the Gulf kingdom was lifted on Wednesday, but there have been reports of further violence in the capital Manama on Friday.
Human rights group Amnesty International claim that serious human rights violations continue to be committed in the country with security measures still in place to stop large gatherings.
Alazanyi admitted that his nation was "learning the lessons from our recent past" and emphasised the economic benefits that the race would bring for the whole country.
Speaking before the FIA's meeting in Barcelona on Friday, F1 supermo Bernie Ecclestone had insisted that the FIA's decision would have "nothing to do with money at all", stressing that safety was paramount in his considerations.
The teams, who have been called upon to boycott the race by more than 300,000 people in an online petition, are believed to be against a return to Bahrain.
Before the announcement of Friday's decision, Red Bull driver Mark Webber had gone public with his opposition.
"When people in a country are being hurt, the issues are bigger than sport," the Australian wrote on Twitter.
Former world champion Damon Hill had expressed his personal view that F1 "will forever have the blight of association with repressive methods to achieve order" if it returns to Bahrain this season.
And Max Mosley, FIA president from 1993 to 2009, had warned that sponsors may not want to be associated with a rearranged race.
The inaugural Indian Grand Prix, which is being staged at the newly built Buddh International Circuit near New Delhi, is expected to be moved to 11 December.
If so, the 2011 F1 calendar will stretch further into the year than it has since the 1963 season was completed in South Africa on 28 December.
Mercedes team principal Ross Brawn had previously described any extension of the season beyond the original 27 November finale in Brazil as "totally unacceptable".
The new date for the Indian Grand Prix may yet be disputed, with the Formula 1 Teams' Association (Fota) due to discuss the FIA's decision.
The FIA also released a 21-race schedule for the 2012 season.
Bahrain will open next season, as it was expected to this year, with the United States Grand Prix returning after a five-year absence on 17 June at its new home in Texas.
The Turkish Grand Prix, which has had its future called into doubt because of the increasing cost to stage the race, is provisionally included on 6 May.
The meeting also approved technical rule changes for 2013, including a switch to 1.6-litre turbo-charged engines.
However, the FIA statement said the implementation date of these changes could still be changed by a vote at the end of the month.