Authorities in Beijing have agreed to re-examine a 15 million yuan (£1.55 million) fine imposed on artist Ai Weiwei by the tax bureau.
The outspoken dissident was charged with tax evasion in relation to the Beijing Fake Cultural Development Ltd company in November.
He was arrested and detained for 81 days in April 2011 in what he described as a bid by the authorities to silence his criticism of the government. He was handed a gagging order on his release, but has continued to speak out against the Chinese Communist regime.
The internationally acclaimed artist said he was informed of the latest decision by telephone.
"How they handle this relates to issues of China's rule of law and the safety of its people," Ai said. "It has very broad implications. If they can't resolve this issue very fairly and carefully, it will be bring harm to this society's justice system."
The multimillion pound tax bill levied at Ai prompted tens of thousands of the artist's supporters to send small donations, which where used to pay a guarantee to the tax bureau. Ai has said that he will not treat this money as donations but as loans, which he intends to repay all his well-wishers.
He also received a symbolic €100 donation from the German human rights commissioner Markus Loening.
Ai was last year named by ArtReview magazine as the most powerful artist in the world. His Sunflower Seeds installation, previously shown at Tate Modern in London, is due to open over the weekend at the Mary Boone Gallery in New York.
Chinese authorities have said that Ai is technically still under investigation and could be brought in for further questioning at any time.