Portsmouth's transfer embargo was lifted by the English Premier League (EPL) on Tuesday.
The embargo had been in place since October, with bottom of the league Portsmouth owing money to several clubs.
But the Premier League's latest decision does give manager Avram Grant the chance to bringing players to the south coast side in what remains of the January transfer window.
However, the club have been restricted to signing players only on loan or on free transfers, meaning they cannot spend money on permanent deals.
An statement said Tuesday: "The board of the Premier League has today lifted the player registration embargo on Portsmouth Football Club under the conditions that they are restricted to signing players on loan or who are available on a free transfer.
"The board has taken this action as Portsmouth FC has no outstanding debts to football clubs as of this date."
Portsmouth chief executive Peter Storrie told the club's official website: "We are delighted that the transfer embargo for player registrations has been lifted by the Premier League.
"The club and the Premier League have worked together to allow us to be able to do some business in the last week of the transfer window.
"Avram Grant will now be trying to bring in players to strengthen the squad in loan and free deals."