"The trade on Srinagar-Muzaffarabad road will resume from Thursday," a senior official said after a meeting with PoK officials at Kaman Post.
The meeting was called to end the deadlock over the cross-LoC trade.
The PoK authorities had suspended trade and travel between the divided parts of Kashmir on January 17 after 114 packets of brown sugar were recovered from a truck carrying goods from Muzaffarabad to Uri.
The driver of the truck was also arrested.
After three rounds of talks, the PoK authorities agreed to resume the bus service but remained adamant over their demand for release of the arrested PoK driver.
However, Pakistan relented and allowed the drivers to return following meetings at diplomatic level between New Delhi and Islamabad.