Dan Jarvis has won a battle with Labour party leaders to stand in the Sheffield City Region mayoral election and remain as Barnsley Central MP.
The ruling National Executive committee (NEC) had previously ruled that Mr Jarvis would have to stand down as MP if he wanted to run.
A Labour source revealed that both parties had come to an agreement over the weekend and Mr Jarvis would be able to remain in his parliamentary seat.
Mr Jarvis said: “I am honoured to be Labour’s candidate for the Sheffield City Region mayoral election and I am looking forward to the campaign.
“This is an important role at a crucial moment and we must ensure that we elect a Labour mayor who will deliver a bold and radical plan for delivering real change for the people of South Yorkshire.”
Last week a group of Labour MPs described the NEC decision as “unfair” and “undemocratic”.
The Barnsley MP won Labour’s nomination to be candidate in May’s mayoral election in a ballot the week before and was clear when he stood that, if he won, he would combine both roles.
However, the NEC ruled just days before the ballot ended that these dual positions will no longer be allowed.
Following the ruling, the Yorkshire and Humber Parliamentary Labour Group, which includes 36 MPs in the region, wrote to John Cryer, chair of the Parliamentary Labour Party, asking the NEC to “reconsider their position as a matter of urgency”.
The letter stated: “Dan has been open from the beginning that if elected as mayor, he would continue as an MP.
“He was shortlisted on that basis and elected by the members of South Yorkshire on that clear understanding. For the NEC to change the rules at this stage and only days away from the close of the ballot is unfair, undemocratic and an insult to all members who have so recently taken part in the selection process.
“We also believe that this decision is almost certainly unconstitutional. It would be completely unacceptable if Dan were to be put in a position of not being able to be the candidate and if someone else were to be imposed. “This is hardly an example of empowering and involving our membership in party decision-making.”
The post of the Sheffield City Region Mayor has been mired in controversy because, unlike similar roles in Manchester and the West Midlands, no devolution and funding deal has yet been agreed to go with the appointment.
Two of the four South Yorkshire councils - Doncaster and Barnsley - have rejected a devolution solution centred on the county in favour of joining a pan-Yorkshire proposal.
Last month, 18 of the 20 local authorities in Yorkshire agreed to back a proposal to the government to deliver a One Yorkshire devolution deal. Sheffield and Rotherham were the only Yorkshire councils not to sign up to the plan.
Mr Jarvis is the overwhelming favourite to win the contest as all of the 14 South Yorkshire constituencies which will take part in the election were won by Labour at the last general election.