The town of Wabush removed the fire alert on Sunday on the recommendation of the province's Department of Natural Resources.
The municipality was evacuated two weeks ago for two days after it declared a state of emergency in response to air quality concerns.
Winds had blown smoke into the town from a massive forest fire that at one point was raging just four kilometres outside the town.
Since beginning late last month, the forest fire has consumed around 270 square kilometres of land in western Labrador.
Firefighters continue to fight blazes that continue to burn in other areas of the mainland region of the province.