Mohamed Said Atom, a powerful arms dealer, had been targeted with UN travel and financial sanctions for “kidnapping, piracy and terrorism.”
In June, Atom announced he had laid down his arms and would in future only work through “peaceful means and understanding.”
He accused Shebab, which is linked to Al Qaeda, of being manipulated by a foreign agenda and of killing Muslims.
Shebab controls areas of Somalia and has staged a number of brazen assassinations and killings in Mogadishu, as well as in neighbouring Kenya.
The United Nations Security Council committee dealing with Somalia announced Atom’s removal from the sanctions list.
At the time of Atom’s announcement, the Somali government hailed the development as evidence its amnesty offer to anyone renouncing terrorism, armed military activity, or piracy was producing results.
Following the UN’s decision on Friday, Somali’s Information Minister Mustafa Duhulow said in Mogadishu his government had lobbied the UN to remove repenting individuals like Atom from sanction lists.