In a licence renewal decision last May, the Canadian Radio-television and Telecommunications Commission said it would allow ads on Espace Musique and Radio 2 for three years, starting this month.
The CBC watchdog group Friends of Canadian Broadcasting filed a petition with the Privy Council Office in July, asking the cabinet to order the commission to take another look at the ruling.
The cabinet now says it won't do that.
During public hearings on the renewal, the CBC argued it needed the ad revenue to make up for lower public subsidies.
In making public the decision Wednesday, the cabinet said it is satisfied the move doesn't infringe the country's broadcast policy objectives.
The CBC had asked to be allowed unlimited advertising space on the two networks during the fourth year of the licence term.
The regulator instead gave a three-year window for advertising on the networks, on the condition that it not exceed four minutes for each broadcast hour.
When the decision was announced, the Friends of Canadian Broadcasting warned that it put the CBC on a slippery slope.
It called the ruling the beginning of the end of the last commercial-free service offered by the CBC.