The 26-year-old has not played for the Serie A club this term after being banished for asking for a move in the close-season.
"Pandev's appeal has been upheld by the league commission, which ruled in our favour. Goran's contract with Lazio has therefore been resolved," lawyer Mattia Grassani told reporters.
Inter Milan, AC Milan and Juventus have been linked with moves for Pandev and Inter boss Jose Mourinho mentioned him as a potential replacement for African Nations Cup-bound forward Samuel Eto'o.
"It's the end of a nightmare. I'm sorry for Lazio and the fans. I've been treated shamefully," Pandev said.
Lazio have struggled this term without their most consistent performer for the last two seasons, but club president Claudio Lotito had been adamant that Pandev deserved such severe punishment and would not be sold.
"The sentence was already written," a bitter Lotito told Radio Radio, referring to his unhappiness with the makeup of the specially-convened commission.
"It doesn't finish here. We will see who will win in the end."
Pandev, whose deal with the Rome club was to run out in June anyway, could have left for Zenit St Petersburg for around 15 million euros last summer, according to media reports.
Lazio have now missed out on recouping any money while Grassani said the commission had ruled they would have to pay 160,000 euros in damages and legal costs for the treatment of Pandev, who has trained alone for five months.
Argentine midfielder Cristian Ledesma has also not played for Lazio this season for the same reason and the ruling could open the door for him to leave the club too.
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