The Pakistan Telecommunications Authority has told internet service providers (ISPs) to restore access to the site, according to a spokeswoman.
Google, the owner of YouTube, confirmed service had been restored in Pakistan.
The attempt to block the site, reportedly because of a "blasphemous" video clip, caused a near global blackout of the site on Sunday.
A spokesman for YouTube told the BBC News website: "We are pleased to confirm that YouTube is again accessible in Pakistan."
It is reported that a trailer for a forthcoming film by Dutch lawmaker Geert Wilders, which portrays Islam in a negative light, was behind the restrictions.
The ban was instigated by Pakistan on Friday. At the time, the BBC News website's technology editor, Darren Waters, said that to block citizens from accessing YouTube it was believed Pakistan Telecom "hijacked" the web server address of the popular video site.
Those details were then passed on to the country's internet service providers so that anyone in Pakistan attempting to go to YouTube was instead re-directed to a different address.
But the details of the "hijack" were leaked out into the wider internet by Hong-Kong based provider PCCW and as a result YouTube was mistakenly blocked by other ISPs around the world.
The block on the servers was lifted once PCCW had been told of the issue by YouTube engineers.
A statement from Google said that the problems lasted for "about two hours".
"Traffic to YouTube was routed according to erroneous internet protocols, and many users around the world could not access our site," it said.
A leading net professional told BBC News: "This was probably a simple mistake by an engineer at Pakistan Telecom. There's nothing to suggest this was malicious."
IP hijacking involves taking over a web site's unique address by corrupting the internet's routing tables, which direct the flow of data around the world.
Other countries that have temporarily blocked access to YouTube include Turkey and Thailand.