The Serb had been handed a three-year visa ban after he was eventually sent home from Melbourne in January over his refusal to be vaccinated against Covid-19.
Video: Watch Novak Djokovic's son Stefan hit an amazing backhand winner against Goran Ivanisevic in practice session
But a new Australian government had hinted they would overturn the ban and they did just that on Thursday, announcing that the nine-time Australian Open champion will be allowed to enter the country next year.
“I always said the same: tennis is better when the best players are on the court,” Nadal told reporters at the ATP Finals in Turin.
"At the end we don’t have to create many stories. Even if was a big mess what happened last year in Australia, was not good for our sport. That was past. Roger (Federer) is not playing any more. I missed lot of Grand Slams for injuries. Last year Novak was not able to play there. That’s past.
“What’s next is Novak will be able to play again. That’s the best news possible, especially knowing that now the virus is more under control – seems – around the world. So why not?
“Happy for him. Happy for the tournament. Happy for the fans. That’s it.”
Nadal will be the defending champion at the Australian Open while Djokovic will be going for a record 10th title there, a win that would put him level with Nadal on 22 Grand Slams at the top of all the all-time men’s list.