Portsmouth's transfer embargo has been lifted by the Premier League but the club will only be allowed to bring in free transfers or loan signings.
The ban had been in place since October and now Pompey have until the transfer window closes on 1 February to acquire players to help their relegation fight.
The Premier League says the club has no outstanding transfer debts.
And chief executive Peter Storrie said: "We have worked hard to be able to do some business in the transfer window."
Earlier this month, the Premier League redistributed the club's £7m share of the latest TV income to debtors.
And the embargo was lifted after Portsmouth reached agreement with Udinese over a reported £3.5m they owed the Italian club following the £7m transfer of Sulley Muntari in May 2007, the player having subsequently left Fratton Park for Inter Milan a year later for £12.7m.
In a statement the Premier League said: "The board has taken this action as Portsmouth FC has no outstanding debts to football clubs as of this date."
The league has previously said the club would have to show a substantial improvement in its finances before it would allow a return to full transfer dealing.
Portsmouth still have £60m of debt and face a winding up order in the high court on 10 February which could see the south-coast club become the first from the Premier League to go into administration.
Pompey have also failed to pay their players on time on three occasions this season, while they were only able to name five out of a possible seven substitutes against Sunderland in the FA Cup on Saturday due to injuries and absences in their squad.
They currently sit five points from safety in the Premier League having lost 14 of their 20 games to date.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.