Lisa Kotter was placed on administrative leave for the past three weeks on misconduct allegations.
Kotter told FOX 11 that on Monday, Mayor Judith Magee vetoed a measure passed by the city council last week.
The council wanted to send Kotter's misconduct investigation to a labor attorney for review.
Magee's veto ended the investigation and reinstated Kotter to her job.
Kotter had been accused of abusing city funds for personal vacations.