He was suspended 12 days ago and fined for what Bayonne described as unacceptable off-field behaviour.
But club chairman Alain Afflelou, administrators and coaching staff have now welcomed Phillips back into the fold.
"Mike Phillips is allowed to resume collective training from Wednesday, October 10," the club said on its official website.
It is unlikely that Phillips will be involved in Friday night's Amlin Challenge Cup opener against Italian minnows Mogliano.
There is, though, a strong chance he could feature when Bayonne tackle Newport Gwent Dragons in Wales on Saturday week.
Wales caretaker coach Rob Howley is due to announce his squad for the autumn Tests on October 22, with Phillips a key part of his plans for game against Argentina, Samoa, New Zealand and Australia.
Phillips' latest suspension came 15 months after the Welsh Rugby Union temporarily removed him from their 2011 World Cup training squad following a late-night incident in Cardiff city centre.
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