The investigation was conducted by a labour-relations expert at the behest of the government and looked into a fundraising dinner held for Mar.
The money raised at the dinner was used to clear up debts from Mar's unsuccessful bid for the provincial Tory leadership, and the allegation was that Mar used his civil-servant post as Asian trade envoy to sell tickets.
News of the dinner broke in the lead up to the Alberta election campaign, and Premier Alison Redford put her former rival on leave without pay while the matter was probed.
Mar, a cabinet minister from the era of former premier Ralph Klein, was appointed to the Asia gig by Redford after the leadership race and Opposition parties labelled the situation an example of a pork-barrel appointment gone wrong.
Mar denied wrongdoing from the start and the government said Friday that the investigation found no conflict of interest.
In a news release, it said the invitations to the dinner were changed to make it clear it was a private affair with no connection to Mar's post and Mar was not involved in the direct solicitation of funds.
It found that none of the funds raised at the dinner were paid to Mar and no information was conveyed at the dinner that wasn't otherwise publicly available.
A trip to Hong Kong was auctioned off at the gathering, but the investigation ruled that there was no special access promised to the winner.
Wildrose Leader Danielle Smith said in a press release that Mar should pay back the $20,000 reportedly raised at the dinner as a condition of keeping his job.
"Regardless of the report, this transaction involving Mr. Mar doesn't pass the smell test," she said.
She also questioned the timing of the investigation's results, released four days after Monday's election.
Radio stations CHQR and CHED first reported in the days before the vote that Mar was back on the job. But Redford ducked questions on the issue, saying she wasn't being kept in the loop on the investigation during the campaign.
The Tories went on to win 61 of 87 seats for the party's 12th consecutive majority.
The reinstatement of Mar comes after the premier suggested during the campaign that Mar was in the wrong.
"I wanted to open Asia ... and thought that Gary Mar was a qualified person who could do that," Redford said during the televised leaders debate. "I was very disappointed to see his decision with respect to ethics and I took immediate action when I heard about that."
The government said Mar will be back in Hong Kong next week.