In reaching its decision, the league cited its agreement with the Canadian Hockey League preventing teams from assigning players with junior eligibility to the American Hockey League.
"We determined that the assignment would not have been consistent with our obligations under the league's agreement with the CHL," NHL spokesman Frank Brown wrote in an email to The Associated Press.
Interim coach Ted Nolan accepted the league's ruling, which came a day after the Sabres demoted Grigorenko to their AHL affiliate in Rochester N.Y., for conditioning.
"We thought we were doing it by the rulebook, but unfortunately we weren't," Nolan said. "Now he's back with us. We'll have to sit down and evaluate what the next step is."
Players remain on their NHL team's roster and are paid their full salary during conditioning stints, which last no more than 14 days.
The question became whether the 19-year-old Grigorenko qualified for assignment.
The ruling limits the Sabres' options in determining how to develop a player who has had difficulty earning regular ice time in Buffalo. Grigorenko has two goals and one assist in 15 games this season and had missed two straight games and five of seven as a healthy scratch before being assigned to AHL Rochester.
The Sabres must now choose between keeping Grigorenko on their roster and returning him to his Canadian junior team in Quebec.
Rather than preparing to play against Wilkes-Barre/Scranton on Wednesday, Grigorenko practiced with the Sabres in Buffalo before the team travelled to Philadelphia for a game against the Flyers on Thursday.
Nolan said he had not yet determined whether Grigorenko would play.
The NHL's ruling was the latest twist in what's become an unsettled professional career for the Russian-born player, who was selected by Buffalo with the No. 12 pick in the 2012 draft.
Grigorenko is now playing for his third coach in Buffalo, after Nolan replaced Ron Rolston, who was fired last week.
After opening last season playing in Quebec, Grigorenko earned a spot on the Sabres roster at the end of the NHL lockout. He had a goal and four assists in 22 games before the Sabres elected to return him to Quebec. Grigorenko then came back to Buffalo to play the final three games of the season and two more for Rochester in the playoffs after Quebec's season ended.
The Sabres would prefer Grigorenko develop in the AHL rather than the juniors.
"He's a real nice young man. He's just put in this predicament," Nolan said. "Now we have to go back to the drawing board and see what else might work, and what the best situation is for him to develop his skill and be the dominant player we all think he could be in this organization."
On Wednesday, the Sabres also recalled centre Luke Adam and defenceman Brayden McNabb from Rochester.