The school walk has been the subject of controversy
The decision was taken after Protestant residents from Glenbryn voted in favour of a package of community safety measures in the Ardoyne area during a meeting on Friday night.
Speculation of a deal had mounted following talks between the residents and Northern Ireland's first and deputy first ministers.
Loyalist residents of Glenbryn, where the Holy Cross school is situated, had been protesting outside the school since the beginning of September, prompting a large security operation.
They said they were protesting because of attacks on their community, which they claimed were by the larger Catholic population of Ardoyne.
On Friday night, Glenbryn residents discussed a package of safety measures on offer, such as road ramps, closed circuit television and police patrols.
The MP for north Belfast, Nigel Dodds, and the Progressive Unionist Party assembly member Billy Hutchinson, took part in the meeting.
Chairman of the Holy Cross board of governors, Father Aiden Troy, welcomed the suspension of the protest.
"It's been a trying time for everybody, even people who weren't directly involved in the school," he said.
"It's affected everybody in Ardoyne, not only here in Holy Cross but all the way up through Glenbryn.
"Hopefully, this is the beginning of a new and better life for us all."
Irish Prime Minister Bertie Ahern also relayed his congratulations.
Mr Ahern said he hoped it would now be possible to bring back normality to the people of the Ardoyne - "especially the children".
The development came after the first and deputy first ministers circulated a letter among the school governors, Catholic parents and loyalist protesters.
Balloons
The letters covered a number of issues raised during a recent series of meetings about the daily protests.
Earlier, Catholic parents held a protest against the dispute outside the offices of Belfast city council.
About 200 demonstrators, many carrying placards, and banners blocked roads outside the City Hall.
The Right to Education Group released a red balloon for each of the school children caught up in the dispute and brought traffic in the city centre to a halt.