A local council reversed a decision to evict Jhyimy "Two Hats" Mhiyles after more than 400 residents and tourists signed a "Save the Caveman" petition.
In March, Waverley Council told Jhyimy to pack up his belongings and leave his cliff-top idyll due to hygiene and safety issues.
Some residents had complained that his home was an eyesore and a health risk.
But to other locals and tourists he was a rugged symbol of Australia's pioneering spirit.
Many of these supporters, who passed him along the cliff-top walk from Bondi to Bronte, protested against his eviction and backed an online campaign to help him keep his open-air home.
In response to the campaign, Jhyimy has been allowed to keep his shanty-like shelter - and million-dollar views.
Jhyimy must now abide by a strict set of rules to avoid being evicted again.
He must not dispose of human waste in public, light open fires or use explosives or combustible materials. He must also keep the area tidy, said Waverley Mayor George Newhouse.
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