China's Peng Shuai reacts against Australia's Samantha Stosur during their women's singles first round match on the second day of the 2018 Wimbledon Championships at The All England Lawn Tennis Club in Wimbledon, southwest London, on July 3, 2018.
Chinese tennis player Peng Shuai sparked global concern when she vanished from public view after posting allegations of sexual assault online
Last Friday, security staff had asked spectators to remove T-shirts and a banner saying "Where is Peng Shuai?" before entering the grounds.
Ms Peng vanished for weeks after accusing a top Chinese official of sexual misconduct in November.
She has since re-appeared, but many remain concerned about her wellbeing.
Craig Tiley, chief executive of Tennis Australia - the organising body behind the Australian Open - told reporters they would now allow spectators to wear the T-shirt as long as they attended without the "intent to disrupt" and were "peaceful".
"If someone wants to wear a T-shirt and make a statement about Peng Shuai that's fine," he was quoted as saying in The Sydney Morning Herald.
Tennis Australia had earlier told the BBC that they had a "longstanding policy of not allowing banners, signs or clothing that are commercial or political."
They added they were "happy to welcome" the spectator back to the tournament grounds, but said that "the policy will continue to be applied .. to any items that compromise the safety and comfort of Australian Open fans."
It did not elaborate further.
The decision to ban the shirt was met with fierce criticism from human rights groups and the international tennis community, with some suggesting that organisers were bowing to pressure from major Chinese corporate sponsors.
Australia's defence minister Peter Dutton also lashed out against the ban, calling Tennis Australia's actions "deeply concerning" in an interview with broadcaster Sky News.
"I think we should be speaking up about these issues, and I'd encourage… tennis organisations, including Tennis Australia [to do so]."
Mr Dutton also praised the actions of the Women's Tennis Association (WTA), which has pulled all tournaments from China this year in response to the controversy.
Friday's incident has also sparked the creation of a Gofundme page that promised to print out more T-shirts after reaching its AUD$10,000 (£5,296; $7,179) goal.
Tennis Australia is not the only body that has terms and conditions governing spectators' attire and conduct.
The All England Lawn Tennis Club, which organises Wimbledon, prohibits "any objects or clothing bearing... political statements, objectionable or offensive statements" from the tournament grounds.
In November, Ms Peng posted a 1,600-word note on Chinese social media platform Weibo, accusing former Vice-Premier Zhang Gaoli of forcing her to have sex with him.
She then vanished from the public eye, triggering a wave of global concern among the international tennis community, fans and human rights groups over her whereabouts.
She resurfaced weeks later, and in her first media interview in December following her reappearance, she denied making any accusations of sexual assault and claimed her social media post had faced "a lot of misunderstandings".