Health Canada made the announcement Monday afternoon.
Health Minister Leona Aglukkaq was under pressure from some provinces to forbid the generic form of the drug because it has been so widely abused across the country before its maker pulled it from the market earlier this year.
But Health Canada points out in its decision that the drug is safe and effective when used as prescribed.
Last week, the minister announced further restrictions on the drug which will force manufacturers and pharmacists to report spikes in sales or changes in distribution patterns.
As well, Health Canada wants pharmaceutical companies to better educate health-care professionals and the public on the potential risks of this painkiller as a condition of their licence to make the drug.