The United States has suspended its blacklisting of Kam Air after the Afghan government promised an investigation into claims of opium trafficking by the airline, NATO's coalition force in Afghanistan ISAF announced.
A statement from ISAF said: "The Afghan government has agreed to conduct a full investigation of Kam Air and, if warranted, to take further action."
In return, the US "will support the Afghan government's investigation by providing evidence and documents as required," it said.
The US had banned Afghanistan's largest private airline from its list of potential military contractors, claiming the company on its civilians flights was conveying "bulk" quantities of opium to neighbouring Tajikistan, the Wall Street Journal revealed last week.
The impoverished Central Asian country is regarded as a key transit route used by drug smugglers.
Both the airline and Afghan authorities rejected the allegation. At the end of last month the government demanded proof of drug smuggling from American forces in Afghanistan, which they agreed to do.
ISAF said Monday that Central Command decided to suspend the ban because "it is an appropriate, logical course of action at this time for the sovereign Afghan government to conduct a full investigation of Kam Air."
The US discovered the alleged drug smuggling when it started scrutinising Kam Air after the airline sought a US contract, Richard Longo, the commander of Task Force 2010, a coalition anti-corruption unit, told the WSJ.
Ninety percent of the world's opium is produced is Afghanistan, according to the UN Office on Drugs and Crime (UNODC).
Poppy farmers are taxed by Taliban militants who use the cash to help fund their insurgency against the Kabul government and NATO forces, UNODC said.