Fifa has told the the Republic of Ireland they can keep the services of Northern Ireland-born Darron Gibson.
However, the Republic have lost the battle with NI over the eligibility of players in the future.
Fifa has ruled that the FAI may no longer quote the Good Friday Agreement as a reason for drafting up players born on the island of Ireland.
The FAI can now only use players born in the Republic, or whose parents or grandparents are born in the Republic.
The world governing body will not impose any sanction over Gibson's involvement for the Republic of Ireland in the Euro 2008 qualifiers.
The 19-year-old Gibson is currently on loan from Manchester United at Wolves but is suffering from a broken toe.
The Derry teenager played for NI at underage level before switching to the Republic and he earned a full cap in last month's Euro 2008 qualifer in Slovakia.
Before Tuesday's ruling the IFA had said that Fifa rules made clear that Gibson should not be allowed to play for the Republic because neither the player, nor his parents or his grandparents were born south of the border.
However, the FAI insisted that the player was qualified to play for the Republic under the terms of the Good Friday Agreement, which states that anybody born in Northern Ireland is entitled to Irish citizenship.
Gibson earned his first Republic cap in the friendly win over Denmark in August.
The midfielder was a late call-up for that game after Northern Ireland boss Nigel Worthington had revealed that he was trying to persuade the player to switch allegiance from the Republic.
Gibson played for Northern Ireland U16s but then opted for the Republic.
Since then he has played for the Republic U17, U19, U21 sides before winning two full caps with the senior team.