Jonathan last week suspended the team from international competitions for two years following an embarrassing performance in the World Cup. The Super Eagles were knocked out in the first round after failing to win a game.
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The presidency said Jonathan had reversed his decision after a meeting with the NFF at which the federation told him of their decision to disband the team.
"They assured the President of their commitment to evolving an enduring football development programme, and grow a new senior national team that will bring glory, rather than consistent embarrassment to Nigeria on the world stage," the presidency statement said.
"Based on these assurances, and the appeals of well-meaning Nigerians, including former leaders, President Jonathan has decided to review the earlier two-year ban on the country from all international football competitions."
Football world governing body FIFA had given Nigeria until Monday evening to change its decision and escape being barred from all FIFA-related activities.
The NFF on Sunday fired its top two officials and offered an "unreserved apology" for the team's dismal performance in a last-minute bid to reverse Jonathan's directive.
FIFA confirmed that it had received notice of the decision from the federation and "therefore, the NFF remains vested with all its statutory rights."
