The move follows a half-day hearing by an eight-strong committee of councillors, who gave the go-ahead for Mr Edge to return to work.
Speculation of Mr Edge's future has been rife since it emerged he had been fired from Lancaster City Council in 1994. Derwentside only learnt of the dismissal after he joined the authority.
Alan Hodgson, Derwentside's director of human resources, said: 'An investigating committee of Derwentside DC met on 21 October to consider the case of Barry Edge. As a result of its findings, Mr Edge has now returned to work. No further details can be given, as matters relating to contracts of employment must remain private and confidential.'