The club has not been able to buy players since January this year after breaching Financial Fair Play rules.
The news came the day after the club removed Russell Slade from his position as manager to take up a new role as the club's head of football.
Slade will be in charge of the team for the last time when they play their final match of the season against Birmingham City at home on Saturday.
The sanction will be lifted after the game, and means the club can start looking at potential summer recruits with the transfer window due to open on 10 June.
Chief executive Ken Choo insisted the club would not rush appointing Slade's replacement.
"We will take our time - we need to get the right person into the role," he said.
Cardiff City's transfer embargo has been lifted by the Football League.