Susan Lamb is now free to contest the federal by-election in the Queensland seat of Longman after receiving confirmation from the UK Home Office her British citizenship has been renounced.
The former Labor MP was forced to quit parliament last week after being ensnared in the dual-citizenship crisis.
"Susan Lamb is eligible beyond any doubt to run in the by-election of Longman and she will be an excellent flag-bearer," Labor leader Bill Shorten told reporters in Brisbane on Tuesday.
Ms Lamb faces a tough contest to regain the seat, which she held with a wafer-thin margin of 0.8 per cent.
"What is critical in Longman is not Labor or Liberal but what sort of country we want to be," Mr Shorten said.
Ms Lamb, along with fellow Labor MPs Justine Keay, Josh Wilson and Centre Alliance's Rebekha Sharkie, resigned last week following the High Court ruling ACT Labor senator Katy Gallagher ineligible.
Labor frontbencher Tim Hammond quit for family reasons, triggering a total of five looming by-elections.
Mr Shorten admitted he was surprised a date the five by-elections had yet to be set, with Speaker Tony Smith still to announce a date.
"We want to move on with it," the Labor leader said.
In February, Ms Lamb tearfully revealed in parliament she could not prove her UK citizenship had been renounced because her mother left the family when she was six.
The Home Office agreed to Labor's request to process the renunciation without her parents' marriage certificate, paving the way for her to stand in the by-election.