The bench of Justice Quamrul Islam Siddiqui and Justice Razik-Al-Jalil issued the order to this effect on Monday after hearing a writ petition filed by the BNP leader.
The court also issued a rule asking six officials of the ministry to clarify as to why the order shall not be declared illegal.
They have been asked to respond to the rule within four weeks.
The ministry suspended Mannan on Aug 19 last year after a court had accepted charge-sheet pressed by police in a criminal case against him.
Mannan, also an adviser to BNP chief Khaleda Zia, moved the High Court on Mar challenging the legality of the order.
Md Abu Hanif, lawyer of the mayor, toldbdnews24.com there was no bar now on his client to continue as the mayor following the court order.
Mannan was arrested from his Baridhara residence in the capital
on Feb 11 and shown arrested in 19 cases.
Panel Mayor Asadur Rahman Kiron is serving as an acting mayor since
Mannan was released on bail in the cases on Mar 2.