The lifting of the order comes after it was announced Sheen is to replace Michael J Fox in the television comedy Spin City. He also appeared in last year's hit film Being John Malkovich, playing himself in a cameo role.
The 34-year-old star of Young Guns and Hot Shots! had been on probation in California for two years for alcohol and drug abuse and a 1996 battery conviction against a former girlfriend.
But Malibu Municipal Court judge Lawrence Mira ended the order, telling Sheen: "You've made an enormous turnaround in your life and career. You don't need me anymore."
The lifting of the order comes after it was announced Sheen is to replace Michael J Fox in the television comedy Spin City. He also appeared in last year's hit film Being John Malkovich, playing himself in a cameo role.
After the ruling, he told reporters he felt "great".
"They say the longest journey begins with a single step. I took that step two years ago in the courtroom. Everything has improved since then," he said.
Conviction
Judge Mira first gave Sheen a one-year suspended prison sentence and two years probation in June 1997, when he was convicted of attacking his then-girlfriend.
In May 1998, the probation was extended when Sheen was admitted to hospital after accidentally taking an overdose of illegal drugs.
At the time, his father, Martin Sheen, asked prosecutors to file probation violation charges against his son, and Mira increased Sheen's probation to the middle of 2000 and ordered him into a drug rehabilitation programme.
Since then, he has given up his vices and worked in the community, while continuing as an actor.
In September 1999, Judge Mira turned down an attempt to end his probation because Sheen had twice walked out of a rehabilitation clinic.
Now Sheen is appreciating being given a second chance in Hollywood.
He said: "They say that success tasted the second time around is so much sweeter. I find I'm tasting that."